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Audit Objective

Determine whether the Board properly managed District finances by adopting realistic budgets and developing long-term financial plans for reserve funds.

Key Findings

• The Board overestimated appropriations by an average of approximately $1.9 million annually from 2014-15 to 2016-17, which resulted in accumulation of excess unrestricted fund balance.
• The unrestricted fund balance exceeded statutory limitations.
• District officials did not prepare and submit a plan for reserves annually and reserves were overfunded.

Key Recommendations

• Adopt budgets that include realistic expenditure estimates.
• Develop a plan for the use of excess unrestricted fund balance in the general fund.
• Review reserves to determine if amounts are necessary and reasonable and ensure a plan for reserves is prepared and submitted in accordance with District policy.

Officials generally agreed with our recommendations. Appendix B includes our comments on the District’s response.