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Audit Objective

Determine whether the Board’s 2018-19 adopted budget was realistic and structurally balanced based on historical or known trends.

Key Findings

• The Board and District officials neglected to use accurate estimates of appropriations to balance the 2018-19 budget, which contributed to an unplanned operating deficit of $27.4 million.
• The Board failed to adopt a structurally balanced budget and did not follow its fund balance policy when it appropriated fund balance to finance the 2018-19 budget.
• The District lacks a comprehensive multiyear financial plan.

Key Recommendations

The Board and District officials should develop and adopt structurally balanced budgets that:

• Include realistic estimates of revenues and appropriations based on historical trends or other known factors.
• Comply with the Board’s fund balance policy and include a plan to eliminate the fund balance deficit and restore and maintain minimum thresholds.
• Contain comprehensive multiyear financial plans with goals and objectives for funding long-term operating needs.

District officials generally agreed with our recommendations and have initiated or indicated they planned to initiate corrective action.