Purpose of Audit

The purpose of our audit was to evaluate the District’s financial condition for the period July 1, 2011 through March 13, 2014.

Background

The Schenectady City School District is located in the City of Schenectady in Schenectady County. The District is governed by an elected seven-member Board of Education and operates 19 schools with approximately 9,600 students. General fund budgeted appropriations for the 2013-14 fiscal year totaled approximately $159 million.

Key Findings

• The Board did not adopt a policy establishing the level of unrestricted fund balance that should be maintained.
• The general fund’s cash level was deficient, resulting in the issuance of short-term debt known as revenue anticipation notes (RANs) in order to pay bills and other obligations when due.
• Budgets for 2010-11 through 2013-14 were not structurally balanced, relying on significant amounts of appropriated fund balance to finance operations.

Key Recommendations

• Develop and adopt a fund balance policy establishing the amount of general fund unrestricted fund balance to be maintained within the statutory limit.
• Develop a plan for the repayment of RANs and for the long-term management of cash flow requirements.
• Ensure that future budgets are structurally balanced without relying on fund balance as a financing source.