Issued Date
July 13, 2018
Audit Objective
Determine whether the Board of Education (Board) appropriately managed the Sagaponack Common School District’s (District’s) fund balance.
Key Findings
- Unrestricted fund balance increased to $1.04 million as of June 30, 2017, or 61 percent of the ensuing year’s appropriations, exceeding the statutory limit by 57 percentage points.
- Adopted budgets overestimated appropriations by an average of about $360,000 (25 percent) each fiscal year.
- Reserve funds are overfunded by at least $35,000 and the Board has not outlined the rationale, objective, funding level and conditions under which each will be used.
Key Recommendations
- Use surplus funds as a financing source for funding one-time expenditures, funding needed reserves or reducing property taxes.
- Adopt policies and implement plans for how fund balance should be managed and used.
- Adopt annual budgets with appropriations that are realistic and based on historical trends or other known factors.
- Review reserves to determine whether the balances restricted are necessary and reasonable, and use excess amounts in a manner that benefits residents.
The results of our audit and recommendations have been discussed with District officials and their comments, which appear in Appendix A, have been considered in preparing this report. District officials generally agreed with our recommendations and indicated they planned to take corrective action. Appendix B includes our comment on an issue raised in the District’s response letter.