Purpose of Audit

The purpose of our audit was to evaluate the District’s financial condition and the use of fund balance and reserve funds for the period July 1, 2008 through August 5, 2013.

Background

The Cassadaga Valley Central School District is located in Chautauqua County. The District is governed by the Board of Education, which is composed of five elected members. General fund budgeted appropriations for the 2013-14 school year are $19,967,698.

Key Findings

• District officials consistently over-estimated expenditures in the general fund by a total of $6.3 million over the five-year period ending June 30, 2013. Therefore, the District did not need to use the $5.8 million of fund balance that the Board appropriated as a funding source in the general fund budgets for the same five-year period. Instead, the District has experienced operating surpluses in the general fund for four of the last five years, totaling $1,100,434, leading to unexpended surplus fund balance exceeding the statutory limit of 4 percent of the ensuing year’s operations for the last two fiscal years.
• District officials could not demonstrate a planned need for more than $876,000 in reserves.

Key Recommendations

• Develop realistic expenditure and fund balance estimates for the annual general fund budget. Develop a plan for the use of the surplus balances in the reserve funds identified in this report in a manner that benefits District taxpayers.
• Develop comprehensive policies related to the establishment and use of reserve funds. Review all reserves and determine if the amounts reserved are necessary, reasonable, and in compliance with statutory requirements.