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Audit Objective

Determine whether the Board and District officials adequately managed the District’s financial condition.

Key Findings

District officials:

• Consistently adopted budgets that in total overestimated appropriations by $9.3 million for 2015-16 through 2017-18.
• Approved more than $9.3 million in unbudgeted year-end transfers to reserves and the capital projects fund.
• Maintained six reserves with balances totaling $9.6 million as of June 30, 2018, that were potentially overfunded or unnecessary.

Key Recommendations

The Board and District officials should:

• Provide transparency by developing and adopting budgets that include reasonable estimates of appropriations.
• Comply with the statutory limit for fund balance and use surplus funds as a financing source for one-time expenditures, paying down debt or reducing property taxes.

District officials generally agreed with our recommendations and indicated they planned to initiate corrective action. Appendix B includes our comment on an issue raised in the District’s response letter.