An independent auditor hired to look into what went wrong with the Nampa School District's money-handling discovered no indication of fraud or misuse, but he did find ample room for improvement in district policy.

Teachers and others overflowed the school board meeting room Tuesday night as Jae Hallett of the Boise accounting firm Eide Bailly outlined his findings.

Among Hallett's recommendations:

• The district must build a fund balance, ideally of at least 5 percent (more than $3.5 million), even though it will mean continuing to cut costs after the current $4.3 million shortfall is fully addressed.

• "Expenditures need to be monitored more closely … you had several years where your expenditures exceeded your budget amount," Hallett said, noting that such spending violates state law.

• "The budget process needs more accountability."

Board member Daren Coons relayed many residents' questions when he asked the auditor to discuss, "Whose fault was it?"

"That's a valid question and a good headline," Hallett said, later adding, "Blame is kind of a tough word. I'd say culpability."

The culpable include those who prepared district budgets in the past few years, counting the same revenue twice and making other blunders, he said, as well as the administrators who oversaw district spending and, to a lesser degree, the board.

"I think most of the people involved in that process are no longer here," Hallett said.

Longtime District Superintendent Gary Larsen resigned in August, shortly after the massive shortfall was discovered. Assistant Superintendent Josh Jensen resigned in November.

The district recently gained a judge's approval to borrow money to meet expenses for the rest of this school year, and voters will be asked to approve a $4.3 million supplemental levy March 12. Those steps should help the district reach a zero-fund balance by the end of this fiscal year, Hallett said.

He recommends the district save at least $750,000 from its yearly revenues for each of the next four years to build a fund balance of $3 million to $4 million.

New Superintendent Thomas Michaelson, hired to help the district regain its financial footing, said the district has trimmed its spending in many ways and is establishing new policies aimed at ensuring the current financial woes are not repeated.

And he expressed hope that taxpayers approve the upcoming supplemental levy despite the district's past missteps.

"Everybody has a right to be upset and angry," Michaelson said. "I am, too. But I think it would be almost criminal if we didn't support it (the levy) because of our anger."