Audit Objective
Determine whether the Silver Creek Central School District (District) Board of Education (Board) and District officials properly managed fund balance and reserves.
Key Findings
The Board and District officials need to improve their budgeting practices and transparency. Although our 2016 audit identified similar deficiencies, officials did not effectively implement corrective actions. As a result, the Board and District officials continued to not properly manage fund balance and reserves, resulting in more taxes being levied than were needed to fund operations.
The Board and District officials:
- Overestimated general fund appropriations by $6.7 million and appropriated $2.7 million of fund balance and reserve funds that were not needed to fund operations from 2018- 19 through 2020-21.
- Adopted annual budgets which gave taxpayers the impression the District would have operating deficits when it had operating surpluses; the swing in operational results totaled $9.7 million.
- As of June 30, 2021, maintained a surplus fund balance that exceeded the legal limit of 4 percent by approximately $7.1 million, or 27 percentage points.
- Overfunded four reserve funds by as much as $2.3 million.
Key Recommendations
- Adopt reasonable budgets.
- Reduce surplus fund balance to comply with the statutory limit.
- Reduce overfunded reserves in accordance with applicable statutes.
District officials generally agreed with our findings and recommendations, except for certain issues. Appendix B includes our comment on issues District officials raised in their response.