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Audit Objective

Determine whether District officials effectively managed the general fund balance.

Key Findings

• District officials need to improve budgeting practices to more effectively manage fund balance. Specifically, the District’s surplus fund balance exceeded the statutory limit by 32.7 to 42.8 percentage points at the end of the last three fiscal years.
• Appropriations were consistently overestimated resulting in increasing fund balance levels and the District did not use all of the fund balance appropriated to finance operations for fiscal years 2016-17 through 2018-19.
• The Board has not adopted an adequate multiyear financial plan.

Key Recommendations

• Use surplus funds as a financing source to fund one-time expenditures and reserves, pay off debt or to reduce District property taxes.
• Adopt annual budgets with realistic estimates of appropriations.
• Periodically review and update the District’s multiyear financial plan for actual operating results.

Except as specified in Appendix A, District officials generally agreed with our recommendations and indicated they planned to take corrective action. Appendix B includes our comment on issues raised in the District’s response letter.