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Audit Objective

Determine whether the Clarence Central School District’s (District) Board of Education (Board) and District officials effectively managed the District’s financial condition.

Key Findings

The Board and District officials did not effectively manage the District’s financial condition. As a result, the District levied more taxes than needed to fund operations. The Board and District officials:

• Consistently overestimated general fund appropriations from 2018-19 through 2020-21 by a total of $16 million and appropriated $6.4 million that was not needed or used.
• Recorded fiscal year-end commitments related to unperformed contracts for goods and services totaling $3.3 million during the audit period. However, $3.2 million was unsupported or for unbudgeted purchases. In effect, officials improperly sheltered a portion of surplus fund balance from the statutory limit and made surplus fund balance appear less than it actually was.
• Adopted annual budgets which gave the impression the District would have operating deficits totaling $6.4 million when it had operating surpluses totaling $7.3 million, or a swing in operational results of $13.7 million.
• As of June 30, 2021, surplus fund balance totaled $9.2 million, or more than 6 percentage points above the 4 percent legal limit.

Key Recommendations

• Develop budgets that include reasonable appropriation estimates, only appropriate fund balance when needed and ensure encumbrances are appropriate.
• Develop a plan to reduce surplus fund balance to comply with the statutory limit.

District officials generally agreed with our findings and indicated they plan to initiate corrective action. Appendix B includes our comments on certain issues District officials raised in their response.