Purpose of Audit

The purpose of our audit was to evaluate the District’s financial management practices and employee compensation payments for the period July 1, 2013 through May 19, 2017.

Background

The Salamanca City School District is located in the City of Salamanca and the Towns of Carrollton, Great Valley, Little Valley, Napoli and Salamanca in Cattaraugus County. The District is governed by an elected seven-member Board of Education. The District operates three schools with approximately 1,300 students. Budgeted appropriations for the 2016-17 fiscal year totaled approximately $29.6 million.

Key Findings

• Unrestricted fund balance was 62 percent of 2016-17 budgeted appropriations and exceeded the statutory limit by $17 million (58 percentage points).
• The Board and District officials have not effectively managed four reserve funds with balances totaling approximately $4.1 million.
• The Board has not adopted written policies and District officials have not developed written procedures formalizing controls and oversight associated with the payroll function.

Key Recommendations

• Maintain unrestricted fund balance within the statutory limit.
• Review all reserves at least annually to determine if the amounts reserved are necessary and reasonable. Any excess funds should be transferred to unrestricted fund balance (where allowed by law) or to other reserves established and maintained in compliance with relevant statutes.
• Develop and adopt written payroll policies and procedures.