By Donald WittkowskiOcean City’s school district is well managed and in strong financial shape, according to the results of an annual audit presented to the Board of Education on Wednesday night.The audit came out “clean” and uncovered no negative findings, 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, 2016.“This is a clean audit report this year. No findings or recommendations,” Garcia told the school board. “That’s not an easy thing to do. There are numerous rules and regulations that the state and feds impose on school districts.”Garcia went out of his way to praise the school district’s business administrator, Tim Kelley, and his staff for the results.“To have a clean audit is a credit to the entire district, but especially the business office, Mr. Kelley and his staff,” Garcia said, prompting applause from the board members.The audit showed that the district’s general fund ended the year with $43.5 million in revenue, an increase of about $2.2 million 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 $12.6 million in tuition, Garcia said.Local taxes are the largest single source of revenue for the school district. Tax revenue totaled just shy of $22 million, about the same as the previous year, the audit found.Reflecting the district’s financial strength, it finished the year with a surplus of nearly $1.5 million, Garcia said. He noted that the surplus will help to fund the district’s 2016-17 budget.Despite the clean audit results, Garcia raised concerns about the district’s money-losing cafeteria fund. For the year, there was a $77,000 cafeteria deficit, which was partially offset by a $75,000 subsidy from the school district.Garcia urged the board to find ways to avoid a future deficit in the cafeteria fund, either by boosting revenues or cutting expenses. He said a turnaround should not be expected in the next year, but is possible within two or three years.The deficit primarily resulted from an approximately $42,000 decline in cafeteria revenue, mainly because fewer students are buying their lunches, Garcia explained.Kelley told the board that the district is reviewing the lunch programs at the high school, intermediate school and primary school to find out the cause of the revenue decline.Joseph Clark, the school board president, said there have been no complaints made to the district about the quality of the cafeteria food. He noted that the school board members also eat in the cafeteria to sample the lunches.School board member Cecilia Gallelli-Keyes is questioning why fewer students are buying cafeteria meals.One school board member, Cecilia Gallelli-Keyes, questioned whether more students are simply bringing their lunches to school instead of buying cafeteria meals.“Are the kids not liking what’s being served?” she asked. “Are they packing their lunches more?”In another presentation on Wednesday night, the board was told that Ocean City’s students are exceeding both the state and national averages for standardized testing, including the PARCC, SAT and Advanced Placement exams.Curt Nath, the district’s director of academic services, said Ocean City High School’s graduation rate also is much higher than the state average. For 2016, the graduation rate was 95.2 percent in Ocean City, compared to about 84 percent statewide, Nath said.For the SAT tests in 2016, Ocean City’s students had an average composite score of 1,577 for English, math and reading, compared to 1,501 for New Jersey and 1,484 nationally. Ocean City’s SAT scores are also trending upward in the past five years, compared to declines at both the state and national levels, Nath reported.In an interview after the board meeting, Nath said the district is pleased with the student test results, but “will not rest on its laurels” as it continues to strive for academic excellence.“The fact is, doing well is a nice piece for us,” he said. “While nice, it’s not the end of the road.” Michael Garcia, a partner in the Ford-Scott & Associates accounting firm, reported no negative findings in the audit for the school district.