Albion Central School District – Financial Management (2021M-200)

Issued Date
March 11, 2022

[read complete report - pdf]

Audit Objective

Determine whether the Albion Central School District (District) Board of Education (Board) and District officials adopted realistic budgets and properly managed fund balance and reserves.

Key Findings

The Board and District officials did not adopt realistic budgets and did not properly manage fund balance and reserves. The Board and District officials:

  • Overestimated appropriations by a total of $24 million from 2017-18 through 2020-21.
  • Overfunded and did not properly use the retirement contribution reserve fund.
  • Could not explain how the Finance Committee participated in the budgeting process or identify what reports the Committee receives or how they are reviewed.

The District’s budgeting practice of overestimating appropriations resulted in the District levying more real property taxes than needed and resulted in the accumulation of surplus fund balance in excess of the statutory limit by $17.3 million or 47 percentage points.

Key Recommendations

  • Adopt budgets with realistic and reasonable estimates.
  • Develop a plan for the use of excess surplus fund balance in a manner that benefits District taxpayers.
  • Consult with legal counsel regarding excess funds in the retirement contribution reserve fund.

District officials generally agreed with our findings and recommendations and indicated they planned to initiate corrective action.