School district in strong financial shape, receives large donation
Wednesday, December 26, 2012 5:19 AM
The ISD #297 Board of Education reviewed the audit for the fiscal year ended June 30, 2012, at its Dec. 17 meeting.
"I do not work with a lot of districts that do not have to
borrow." Kimberley Hillberg
Certified Public Accountant Kimberley Hillberg of Larson Allen presented the report.
Highlights included a rise in unassigned fund balance from $401,188 to $497,608. That's about 14 percent of annual expenditures, which is a healthy amount since financial experts recommend 8 to 16 percent, Hillberg said.
"You guys are fortunate to be in that range. We have a lot of districts that are kind of running 'lean and mean' as of late," she added.
"Fund balance also plays an important role in terms of cash flow. A lot of districts across the state have to short-term borrow. In fiscal year 2011, you actually did short-term borrow, but in 2012 you did not. I do not work with a lot of districts that do not have to borrow."
The debt service fund balance was closed out in 2012. "What happens is that anything that was left was moved into the general fund," Hillberg noted.
"You will have a levy reduction in the next couple of years that will then offset that particular restricted fund balance in your general fund."
In other words, the district will save money by not needing any short-term borrowing to meet day-to-day expenses, and those savings will be passed along to taxpayers.
"The district looks good fund balance wise," Hillberg concluded.
The report identified seven "significant deficiencies" in internal controls over financial reporting.
Those included oversight of the financial reporting process, adjusting journal entries, control over payroll reporting, controls over cash receipts, controls over wire transfers, review of cash reconciliations and approval of timesheets.
"The vast majority of the deficiencies are just because you are a small entity with a limited number of people doing the accounting work," Hillberg said, "in a sense, not having enough eyes to separate duties."
Board approval of electronic transfers should come to directors every month, Hillberg added. That's required under Minnesota legal compliance rules.
Student activity funds are a separate audit. Hillberg cited two minor issues with those, since activity funds have not all been closed out when classes graduate, and none of the funds should show a negative balance.
The audit report was approved by unanimous vote.
The 2013 levy certified
The school board certified the 2013 levy at $555,888, which is $3,718 less than the 2012 amount. Local property taxes pay 15.95 percent of the school's budget.
State funding covers 72.44 percent while federal coffers contribute 5.80 percent. All other sources make up 5.81 percent.
Large donation accepted
A 1937 Spring Grove graduate has left a sizable estate gift to Spring Grove High School.
Board members voted to accept with thanks a $31,885 donation from the estate of Betty Bretz (formally Bessie Quinnell). Mrs. Bretz requested that the money go towards extracurricular activities.
"We're very thrilled to receive this gift," Superintendent Rachel Udstuen said, adding that the gift would be publicized so that community members can submit ideas on how the money should be spent. Those ideas will then go to the finance committee for review and prioritizing.
"We'll try and make sure that we don't spend all of the funds in one area," Udstuen stated. "There are a lot of things that we can do with that money."
Next board meeting set
The Spring Grove School Board was scheduled to have its next regular meeting on Jan. 21, 2013, which is Martin Luther King, Jr. Day. The meeting has been rescheduled to Tuesday, Jan. 22 at 7:30 p.m. in the Media Center.