Audit Objective
Did the Fulton City School District (District) Board of Education (Board) and District officials effectively manage the general fund's financial condition?
Audit Period
June 30, 2022 – December 5, 2025
We extended the audit period to review the District’s budget-to-actual revenue and expenditure results and projected operating deficit for the 2025-26 fiscal year as of May 20, 2026.
Understanding the Audit Area
A board and district officials are responsible for effectively managing the general fund’s financial condition to maintain a district’s fiscal stability and ensure sufficient financial resources are available to support current operations and future educational needs. Sound financial management includes adopting structurally balanced budgets, maintaining appropriate fund balance and reserves, monitoring financial performance and making informed financial decisions. These practices help safeguard public resources, strengthen a district’s long term financial condition and promote accountability, transparency and public trust.
The District’s general fund budgeted appropriations for the 2025-26 fiscal year totaled approximately $94 million.
Audit Summary
The Board adopted budgets that relied on appropriated fund balance and underestimated expenditures, resulting in recurring operating deficits that significantly depleted the District’s financial cushion. As a result, the District's surplus fund balance declined to $607,034 at the end of the 2024-25 fiscal year, representing just 0.6 percent of the ensuing year’s budget. The District also issued $8 million in revenue anticipation notes (RANs) to address year-end cash flow needs.
In the 2023-24 and 2024-25 fiscal years, the Board appropriated approximately $966,000 in fund balance to finance the budgets. Additionally, District officials underestimated expenditures by approximately $4 million. Together, these budgeting practices contributed to combined operating deficits totaling approximately $5.3 million. If these trends continue, the District will likely deplete its remaining fund balance, leaving few financial resources available to address unforeseen circumstances or support future budgets.
District officials also did not review or update the District’s multiyear financial plans, limiting their ability to identify potential financial issues, evaluate long-term spending decisions and effectively plan for future financial and capital needs.
The report includes five recommendations that, if implemented, will improve management of the general fund’s financial condition by strengthening the District’s budgeting and multiyear planning practices, promoting long-term fiscal stability, and helping to ensure sufficient financial resources are available to meet current and future operational needs. District officials generally agreed with our findings and indicated they have initiated or plan to initiate corrective action. Appendix C includes our comment on an issue raised in the District’s response.
This audit was conducted pursuant to Article V, Section 1 of the State Constitution and the Office of the New York State Comptroller’s (OSC’s) authority as set forth in Article 3 of the New York State General Municipal Law (GML). The audit’s methodology and standards are included in Appendix D.
The Board has the responsibility to initiate corrective action. A written corrective action plan (CAP) that addresses the findings and recommendations in this report must be prepared and provided to OSC within 90 days, pursuant to Section 35 of GML, Section 2116-a (3)(c) of the New York State Education Law and Section 170.12 of the Regulations of the Commissioner of Education. To the extent practicable, implementation of the CAP must begin by the end of the next fiscal year. For more information on preparing and filing the CAP, please refer to the OSC brochure, Responding to an OSC Audit Report, which was provided with the draft audit report. The CAP should be posted on the District’s website for public review.