The Sharon City School District's reserve fund is lower than it should be, a situation the district's business manager said is a concern.

School Directors Wednesday were given an audit report from John Mastrian of Black, Bashor & Porsch, Sharon. Though the audit contained no reportable conditions, issues of non-compliance or questionable costs, it said the district's fund balance is at $603,936. The unallocated money is set aside for unexpected expenses.

Business Manger James Wolf said the state recommends a district's fund balance be 5 percent of their budget. That amount should be over $1 million for Sharon, he said.

The district has struggled to get the fund balance up to an acceptable level and failed again in the 2001-02 school year when they spent $300,000 of the then $900,000 balance.

Wolf said he and Superintendent Dr. Donna DeBonis have talked about curtailing spending for the rest of the year.

The district also had a $321,364 shortfall in revenues for the 2001-02 school year, partly due to taxes that weren't collected.

On the positive side Wolf said in 2002 the district collected $182,452 more in real estate taxes than was budgeted, and that money can be used to offset the shortfall. The district collected a total of $4,368,532 in real estate taxes.

Wolf said the increase in tax collection is due to several things. He said he budgeted conservatively because only 87 percent of the taxes were collected in 2001. That percentage jumped to 89 in 2002, he said.

The district also anticipated getting $96,000 per mill of taxes but in 2002 a mill brought in $99,000 for the district.

The district has $27,510,000 in debt which is scheduled to be paid off in 2021.

Mastrian told directors the district spent about $9 million in capital expenses last year. That money was used for construction at the high school.

The district also collected $2.4 million in federal money last year, Mastrian said.