Canisteo-Greenwood Central School District – Financial Management (2016M-362)

Issued Date
December 30, 2016

Purpose of Audit

The purpose of our audit was to review the District’s financial management practices for the period July 1, 2012 through May 5, 2016.

Background

The Canisteo-Greenwood Central School District is located in the Town of Andover in Allegany County and the Towns of Bath, Canisteo, Greenwood, Hartsville, Hornellsville, Howard, Jasper, Troupsburg and West Union in Steuben County. The District, which operates two schools with approximately 920 students, is governed by an elected seven-member Board of Education. Budgeted appropriations for the 2015-16 fiscal year totaled approximately $22.6 million.

Key Findings

  • Although District officials appropriated fund balance each year, none of it was needed because District officials overestimated appropriations each year by an average of $1.1 million or 5 percent.
  • District officials have not effectively managed fund balance and have allowed unrestricted fund balance to exceed the statutory limit for the past three fiscal years by an average of $2.7 million.
  • District officials have allowed reserve balances to accumulate to excessive levels and have consistently levied taxes for expenditures that could have been paid for with reserve funds and the Board has not developed a written reserve fund policy or documented its rationale for setting aside funds in reserves, optimal funding levels or conditions under which the reserves would be used.

Key Recommendations

  • Ensure budgets include realistic appropriations based on actual needs and planned use of fund balance to avoid levying taxes at a level greater than necessary.
  • Maintain unrestricted fund balance within the statutory limit and develop a plan to reduce unrestricted fund balance in a manner that benefits District residents.
  • Develop a written reserve fund policy indicating how much money will be reserved, how each reserve will be funded and when the balances will be used to finance related costs.