Purpose of Audit

The purpose of our audit was to review the District’s financial management practices and reserves for the period July 1, 2012 through March 18, 2016.

Background

The Attica Central School District is located in the Towns of Attica, Bennington, Java, Middlebury, Orangeville, Sheldon and Wethersfield in Wyoming County; the Towns of Alexander and Darien in Genesee County; and the Town of Wales in Erie County. The District, which operates three schools with approximately 1,300 students, is governed by an elected seven-member Board of Education. Budgeted appropriations for the 2015-16 fiscal year totaled approximately $28.2 million.

Key Findings

• District officials transferred more than $1.7 million of surplus funds from the general fund to the debt service fund from July 1, 2010 through June 30, 2013 to reduce the general fund’s unrestricted fund balance to be within the legal limit.
• The District has not developed a comprehensive written plan that communicates the need for maintaining certain reserve balances, the Board’s financial objectives for the reserves, optimal funding levels or the specific circumstances under which they will be used or replenished.
• The balances of three reserves totaling approximately $2.5 million were excessive compared to the potential costs for which those reserves were established.

Key Recommendations

• Properly report and use statutorily restricted money to pay related debt service expenditures in compliance with statutory requirements. Money improperly residing in the debt service fund should be transferred to unrestricted fund balance in the general fund.
• Develop a comprehensive written policy or plan for establishing, funding and using reserve funds.
• Develop and implement a plan for using the excess reserve fund balances identified in this report in a manner that benefits District residents and is in compliance with statutory provisions.