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Audit Objective

Determine whether District officials properly managed fund balance and reserves.

Key Findings

• Unrestricted fund balance exceeded the statutory limit by more than $650,000 (4 percentage points) as of June 30, 2017.
• The Board appropriated fund balance not needed to fund operations and overestimated appropriations by a total of approximately $2.7 million (6 percent).
• The Board did not adopt an adequate reserve fund policy and three reserves with balances totaling more than $1 million appear to be overfunded.

Key Recommendations

• Reduce the amount of unrestricted fund balance to within the legal limit.
• Adopt budgets that include realistic estimates for expenditures.
• Adopt a more comprehensive reserve policy and review reserves to determine whether reserve balances are necessary and reasonable.

District officials generally disagreed with our recommendations. Appendix B includes our comments on issues raised in the District’s response letter.