The Duluth school district’s general fund reserve has grown to more than $4 million, according to unofficial results released in an independent audit Monday.

Last year’s fund reserve at the end of the fiscal year was $1.9 million; the lowest point since its creation in the mid-90s. An increase in state aid coupled with the decision to refrain from using reserves to pay off long-range plan construction debt has reversed the trend of a declining reserve fund.

The Duluth School Board’s policy says the reserve should at minimum be 10 percent of expenditures, which are around $100 million. The district hasn’t met that figure for four years, but it has projected the reserve fund will reach the minimum by summer.

Board members were told at its business committee meeting by independent auditor Deborah Medlin of the Duluth office of accounting firm Wipfli that the district is moving in the right direction.

“Even if you ended at zero I would say governments are not in the business of making money,” she said, because they annually receive state funding. “The correct amount of a fund balance is your charge, and knowing what the future brings for you.”

She noted a smaller fund balance is why the district must enact short-term borrowing. The board will vote Tuesday to borrow $4.4 million for cash flow, because some state aid hasn’t yet arrived. Since 2011, when the state began withholding aid to help its own budget, that number was about $20 million each year.

The audit also found that the district understated its revenue by about $735,000, which Medlin said could be attributed to estimates it made for state funding which probably were made too early.

She said the variance from the budget as a whole was small considering its size. The variance is about 2 percent.

The cost to revamp curriculum last summer was paid for in June, and hadn’t been budgeted, said Bill Hanson, the district’s business services director. Other examples for the variance include unanticipated retirements and increases in utilities.

What’s important, he said, is that revenue was in excess of expenditures, which allowed the district to rebuild the reserve.

The audit also revealed the district spent nearly $11,000 per student, which is slightly higher than the state average.

In related news, the board will vote Tuesday on a property tax increase that is slightly less than anticipated. In September, the preliminary tax levy was set at the maximum level of 1.9 percent. It has since been changed to a 1.5 percent increase, which would add about $490,000 to the amount going to the district. That means it would receive $32.85 million from property taxpayers, up from $32.36 million.

Taxpayers the past two years faced increases of about 11 percent. The increases were needed to help make long-range facilities plan debt payments. Last year’s increase also was due to the approval of the general fund-boosting second operating levy question in November 2013.

The truth in taxation hearing is at 6:30 p.m. Tuesday, Dec. 16 in the board room of Historic Old Central High School.