Audit Objective
Did the Honeoye Central School District (District) Board of Education (Board) and District officials effectively manage fund balance?
Audit Period
July 1, 2022 – May 7, 2026
Understanding the Audit Area
A key measure of a school district’s financial condition is its level of fund balance, which represents the difference between revenues and expenditures accumulated over time. School district officials must manage fund balance to ensure long-term educational stability, provide a cash flow cushion for unexpected costs (like emergencies and revenue gaps) and maintain tax rate stability. In addition, officials must comply with the 4 percent surplus fund balance limit and avoid excessive reserves that burden taxpayers, all while ensuring funds are used for genuine needs rather than sitting underutilized. Proper management helps ensure resources meet student needs while maintaining financial health.
The District’s 2025-26 fiscal year general fund total appropriations were approximately $20.6 million. As of June 30, 2025, general fund surplus fund balance totaled $823,829 and nine reserves totaled $9.3 million.
Audit Summary
The Board and District officials did not effectively manage fund balance. As a result, District funds were accumulated beyond amounts reasonably needed, transparency was diminished and opportunities to reduce the tax levy or address District needs may have been missed.
Although the Board and District officials generally maintained surplus fund balance within the statutory 4 percent limit, they did so by transferring surplus fund balance to reserves at, or after, year-end and maintaining $1.1 million excess fund balance in the debt service fund.
As of June 30, 2025, two general fund reserves totaling $977,890 were not reasonably funded. In addition, the Board was not provided with comprehensive reserve reports that included all information required by the District’s reserve policy, limiting its ability to make informed decisions regarding the funding and use of reserves. Furthermore, the Board and District officials did not develop adequate multiyear financial and capital plans to support long-term budgeting and reserve decisions.
This report includes eight recommendations that, if implemented, will improve the District’s fund balance management, reserve practices, long-term financial planning and transparency to taxpayers. District officials generally agreed with our recommendations and indicated they planned to initiate corrective action.
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 C.
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.