ORINDA -- A failure by past Moraga-Orinda Fire District administrators to restrict more than $2 million in general fund reserves for debt repayment has pushed the district into an even deeper financial crisis, with accounting revisions showing the district has exhausted available general fund reserves.
According to a financial audit released last week, officials began relying in June on the district's $3.67 million capital projects fund to maintain operations after moving the money out of the general fund and into a "debt service" fund for making payments on pension obligation bonds the district issued in 2005.
The district has already spent $1.2 million in capital funds to acquire property in Lafayette. Administrators also drew $88,391 of that money in June to sustain operations after using $1.5 million in general fund reserves to balance last year's deficit budget.
The accounting woes are detailed in an audit to be discussed at a meeting Tuesday by the district's finance committee.
Administrative Services Director Gloriann Sasser said she discovered the problems during a review of the district's financial statements. The district hired Sasser in August to replace former administrative services Director Sue Casey, who resigned in July.
A "bond fund" containing district property tax revenue "should have been recorded as restricted," Sasser said. Instead, previous administrators recorded it and another $503,088 "depository account" related to the pension obligation bonds as "unrestricted cash and investments in the general fund." It has since been determined that money in the depository account is available for general fund use.
The audit shows the district also failed to implement a governmental accounting standard that requires officials to designate whether specific fund balances are restricted, committed, assigned or unassigned, and in what order those balances should be spent. The MOFD board of directors is scheduled to adopt the standards at Tuesday's meeting.
Earlier this month, officials decided to cut daily staffing from 19 to 17 to help address a $950,425 budget deficit. The move is estimated to save $550,000 this fiscal year.
The meeting begins at 4 p.m. in the Sarge Littlehale Room, 22 Orinda Way.