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Audit Objective

Determine if the Board and District officials effectively monitor the District’s financial condition by ensuring that budget estimates and fund balance are reasonable.

Key Findings

The Board:

• Did not effectively monitor expenditures and fund balance. As a result, the unrestricted fund balance deficit increased to as much as $171,492 during the audit period.
• Did not properly plan for the funding of and spending from reserves. In addition, the Board transferred unavailable funds to its capital reserves, and expended funds from reserves without adequate public notice; for example, transfers to reserves totaling $593,941 and expenditures from reserves totaling $841,477 that were not included in the budgets.

Key Recommendations

• Review financial reports to monitor available appropriations and fund balance.
• Adopt a fund balance policy that addresses the level of fund balance to be maintained in the operating fund. In addition, adopt a multiyear capital plan and reserve policy.
• Ensure transfers to and expenditures from reserves are included in the annual budget and comply with permissive referendum and public notice requirements.

District officials generally agreed with our recommendations and indicated they planned to initiate corrective action.