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Audit Objective

Determine whether the Board properly established reserve funds and maintained them at reasonable levels.

Key Findings

• The written reserve fund policy does not adequately address funding levels resulting in overfunded reserves that are not used.
• Five reserve funds totaling $3.5 million are overfunded.

Key Recommendations

• Adopt a more comprehensive written policy and review reserves to determine whether they are necessary and balances are reasonable.
• Use excess amounts in accordance with statutory requirements and in a manner that benefits taxpayers.

District officials disagreed with certain aspects of our findings and recommendations. Appendix B includes our comments on issues raised in the District’s response letter.