The Poughkeepsie City School District Board of Education on Wednesday approved creating a $12 million capital reserve fund. It will translate to approximately $30 million in building upgrades, depending on the application of state aid, complementing the ongoing Strong Schools Equal Strong Communities Capital Improvement Project and the imminent Jane Bolin Building Project.

The fund was created by combining various unassigned excess funds and did not take away from any existing programs, projects or services. It comes on the same night the board was presented its 2023-24 external audit showing the district is in healthy financial standing, representing a reversal from past years.

The district is in the midst of more than $120 million in improvements and construction that has already elevated the safety of buildings and upgraded facilities. In the coming months and years, the district plans to create innovation labs in school buildings, renovate the high and middle schools’ auditoriums, and repair the middle school pool, among other improvements.

“We’re transforming our schools into 21st century learning environments to elevate and encourage student success for years to come,” Dr. Eric Jay Rosser, superintendent of schools, said.

The audit, conducted by the firm of PKF O’Connor Davies, found the district’s actual expenditures came more than $17 million below its expected budget, largely due to the application of American Rescue Plan funding, and added nearly $16 million to its fund balance in 2023-24. It ended the year with a total fund balance of more than $50 million, including roughly $5.5 million in unassigned fund balance, which remained within the limit of 4% of the following year’s budget.

“We are required to report any material weaknesses or significant deficiencies to the federal government as well as to the state. Last year there were three material weaknesses and one significant deficiency,” said Melissa Szot, who oversaw the audit for PKF O’Connor Davies. Of those, “the school district did actively work toward resolving all three material weaknesses, so we are happy to report that there are no material weaknesses this year.”

She also noted while the district did not reconcile its significant deficiency during the 2023-24 audit timeframe it has done so since then and they “anticipate it being resolved next year.”