MIDDLETOWN – An audit of the Middletown Enlarged City School District for the period of July 1, 2016 through June 30, 2017 found that the school board has not adopted a fund balance policy.
The district has total appropriations of $173.5 million in fiscal year 2016-17.
The audit found the school board had appropriated $27 million of fund balance in district budgets for the last five years, but only $1.4 million was used. It also said the district’s unrestricted fund balance has exceeded statutory limits in each of the past five years.
Among the key recommendations of the audit are that the board should discontinue the practice of adopting budgets that appropriate fund balance that is not needed to fund operations, ensure that the amount of unrestricted fund balance complies with the statutory limit, and adopt a fund balance policy that outlines the level of fund balance to be maintained and use surplus funds to cover one-time expenditures, pay off debt or reduce property taxes.
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