Fredonia Board of Education President Brian Aldrich listens to a report on the district’s finances. OBSERVER Photo by Braden Carmen.

The Fredonia Central School District received a clean audit. Laura Napoli of Bahgat and Laurito-Bahgat delivered the positive news of an unmodified report on the district’s External Audit Report.

The goal of an external audit is to evaluate if the district’s financial statements are in accordance with generally accepted accounting principles. The unmodified report Fredonia received is the ideal outcome of an audit.

The district did, however, see one area of note this year that differs from previous years. The district’s unappropriated fund balance has fallen below 3% this year, compared to previous years when the fund balance consistently surpassed the 4% limit the state suggests.

Real property tax laws allow for the district to hold 4% of the following year’s budget in unappropriated fund balance. Districts are often cited for keeping more than the 4% limit. Bahgat and Laurito-Bahgat recommends that districts should “at least keep that” as the minimum fund balance for the district. This year, with costs rising across the board, the district is maintaining a lower figure than in previous years.

“Basically, pick a category in the budget, and it will show an increase,” Business Administrator John Forbes stated. He then noted transportation and fuel costs, special education costs, additional staffing needs, and the settlement of two union contracts among the increases to the district’s financial responsibilities this year.

As stated in the External Audit Report, the district currently maintains $3.7 million of fund balance, including $1.692 million of reserves. The district has $1 million of assigned fund balance to the 2023-24 budget. The district carries just over $1 million in unassigned fund balance, which is approximately $400,000 shy of the 4% figure of unassigned fund balance before anticipated aid is returned to the district.

The district unanimously approved the External Audit Report by Bahgat and Laurito-Bahgat, along with the Treasurer’s Report and other financial reports presented by Forbes.