Purpose of Audit

The purpose of our audit was to evaluate the District’s financial condition for the period July 1, 2011 to August 6, 2013.

Background

The Andes Central School District (District) is located in Delaware County. The District is governed by a Board of Education, which has five elected members. The District's budgeted expenditures for 2013-14 fiscal year are $3.8 million.

Key Findings

• District officials are not properly managing the District’s fund balance levels. They have appropriated funds they have not used in four of the last five fiscal years (2008-09 through 2012-13), because the District consistently spent less than what was budgeted. Although District officials used $205,000 of appropriated fund balance in 2011-12, their unreserved fund balance increased to almost 20 percent of the following year’s budgeted appropriations. While the 2012-13 unreserved fund balance dropped slightly, they are still well above amounts allowed by law.
• Two reserves have excess balances totaling $450,000, based on their intended use.
• During this time, real property taxes have increased from $2.5 million in 2009 to $2.7 million in 2013.

Key Recommendations

• Ensure that the amount of the District's unexpended surplus fund balance is in compliance with the Real Property Tax Law statutory limits.
• Review all reserve balances and transfer excess funds to unrestricted fund balance, where allowed by law, or other reserves established and maintained in compliance with statutory directives.