Determine whether the Olean City School District (District) Board of Education (Board) and District officials properly established and used reserve funds and maintained them at reasonable levels.
The Board and District officials properly established the District’s nine general fund reserve funds totaling $10.9 million but did not use the reserve funds and could not demonstrate that approximately $8 million held in seven of these reserves was reasonable or needed.
In addition, the Board and District officials did not:
- Adopt a comprehensive written reserve fund policy or transparently fund reserves.
- Take appropriate action to address overfunded reserves.
Funding reserves at levels higher than necessary for operations and/or need creates an undue burden on taxpayers and withholds funds that may have been used in a more beneficial way.
- Adopt a comprehensive written reserve fund policy.
- Transparently fund reserves and maintain needed reserves at reasonable levels.
District officials generally agreed with our recommendations and indicated they planned to initiate corrective action. Appendix B includes our comments on issues raised in the District’s response.