Audit Objective 

Determine whether the Ardsley Union Free School District (District) Board of Education (Board) and officials effectively managed fund balance and reserves. 

Key Findings 

The Board and District officials did not effectively manage the District’s fund balance and reserves. The Board and District officials’ consistent budgeting practices of appropriating fund balance that is not needed and maintaining unreasonable reserve balances circumvents the statutory limit on surplus fund balance and lacks transparency. As a result, the District levied more taxes than needed to fund operations. 

• The Board and District officials overestimated appropriations from 2017-18 through 2021-22 (excluding 2018-19) by an average of $4.1 million, totaling $16.5 million. 
• The District appropriated fund balance at an annual average of $2.9 million from 2017-18 through 2021-22 while it had an operating surplus in each of those years averaging $1.1 million. As a result, the appropriated fund balance was not used to fund operations and taxpayers were taxed more than necessary. 
• Three reserves totaling $9.6 million as of June 30, 2022, were not reasonably funded or used during the five-year audit period. 

Key Recommendations 

• Adopt realistic budgets and appropriate fund balance only when needed to fund operations. 
• Reduce surplus fund balance to comply with the statutory limit. 
• Revise the reserve policy to include targeted funding levels and conditions under which each reserve will be used. 

District officials disagreed with certain aspects of our findings but indicated they have initiated, or planned to initiate, corrective action. Appendix B includes our comments on the District’s response letter.