Purpose of Audit

The purpose of our audit was to examine the District’s financial condition for the period July 1, 2011, to January 22, 2013.

Background

The Otego-Unadilla Central School District is located in the Towns of Otego, Unadilla, Laurens, Oneonta, Butternuts, Sidney, and Franklin in Otsego and Delaware Counties. The District is governed by the Board of Education which comprises seven elected members. The District’s budgeted expenditures for the 2012-13 fiscal year were $21.2 million.

Key Finding

• Although the Board and District management believed they were effectively managing the District’s financial condition, the adopted budgets continually included overestimated revenues and appropriations. While recognizing that the actual results of the District’s operations were reasonably close to the estimates each year, the cumulative effect of these variances resulted in a 52 percent increase in the District’s fund balance. The Board continued to adopt budgets that included annual real property tax levy increases even though the District had funding surpluses for four of the last five completed fiscal years.

Key Recommendations

• Adopt budgets that include the District’s actual needs based on historical trends, or other identified needs.
• Develop a plan for the use of the surplus balances in unexpended surplus funds identified in this report in a manner that benefits District taxpayers, and provides appropriate transparency through the budget process with public disclosure. Such uses could include, but are not limited to, reducing District property taxes, funding one-time expenditures, or establishing necessary reserves.