Michael Garcia, a partner in the Ford-Scott & Associates accounting firm, reported no negative findings in the audit for the school district. By Donald WittkowskiUnderscoring its strong finances and management, the Ocean City school district received a “clean” audit report Wednesday for the 2016-2017 school year.“We have a clean audit this year. No findings or recommendations,” said Michael Garcia, a partner with Ford-Scott & Associates LLC, an Ocean City accounting firm that conducted the financial review for the fiscal year ended June 30, 2017.Garcia summarized the 100-page audit during a presentation to the Board of Education at its meeting Wednesday night. He noted that school district must comply with numerous rules and regulations imposed by the state and federal governments to achieve a clean audit.Both Garcia and the school board commended the district’s business administrator, Timothy Kelley, and his staff for the results.“It’s great to hear we have a clean audit,” Kelley said while thanking his support staff.The audit showed that the district’s general fund ended the year with nearly $44.9 million in revenue, an increase of $871,000 over the previous year.Most of the extra revenue resulted from an increase in tuition payments from the neighboring towns that send their students to Ocean City’s schools. Altogether, the sending districts paid Ocean City $13.3 million in tuition, an increase of about $700,000 compared to last year, Garcia told the board.In an interview after his presentation, Garcia noted that there was higher enrollment from the sending districts, resulting in more tuition revenue for Ocean City. Sea Isle City, Upper Township, Longport and Corbin City send students to Ocean City.Local taxes are the largest single source of revenue for the school district. Tax revenue came to nearly $22.1 million, about $114,000 higher than the previous year, the audit found.Ocean City’s school district also received nearly $9.1 million in state funding, which counts as revenue.Reflecting the district’s financial strength, it finished the year with a surplus of close to $2.1 million. Garcia noted that the surplus will help to fund the district’s 2017-2018 budget.The district’s financial reserves are a sign of a “very sound financial position,” Garcia said. He explained that the reserves are key for the school district’s ability to tap the bond markets for funding at low interest rates.The district’s total expenses for 2016-2017 came to $41.6 million, an increase of about $609,000 over the 2015-2016 school year. Garcia attributed the higher expenses on growing healthcare costs and an increase in the amount the district spent to buy technology equipment.Despite the clean audit results, Garcia raised concerns about the district’s money-losing cafeteria fund. For the year, there was a $99,349 cafeteria deficit, which was offset by a $100,000 subsidy from the school district.Garcia urged the board to find ways to avoid future deficits in the cafeteria fund. But he acknowledged that it is likely the cafeteria will continue to lose money.“It’s probably something you are going to do every year,” Garcia said of the need for cafeteria subsidies. “It’s something to keep an eye on.”Kelley told the board that the district constantly reviews the food services program to contain cafeteria costs.One board member, Dan Tumolo, a representative from Sea Isle City, asked Garcia whether he knew of any school districts that didn’t lose money on their cafeteria operations.Garcia replied that there are some districts that break even or turn a profit with their cafeterias. He added that Ocean City’s cafeteria loss is not all that significant considering that the district has nearly $45 million in total revenue.