Monticello school district gets annual third-party audit
Dennis Hoogeveen from CliftonLarsonAllen (formerly LarsonAllen) took his seat in the boardroom Monday evening to tell the school board how the district fared in its audit.
He commended the district on their growing fund balance, which went from $2.6 million at beginning of last year to $2.9 million at end of fiscal year 2012, a fund balance that now accounts for 8.5 percent of the district’s annual budget.
“When you have a trend like this … you can see those stepping stones up that represent hard decisions that school districts have to make,” Hoogeveen said. “Those decisions don’t always come easy because it’s more fun to spend it than to save it. This is a very good outcome and shows a good trend as far as the things you have accomplished as a board over these past five years.”
Beyond the healthy general fund balance, most other funds were doing well.
The community service fund is higher than average, up to nearly $545,000 from $214,000 in 2008. Hoogeveen called this a sign of a successful program since user fees for community education programming fund the program.
“If there’s a higher than average cost per student [in the community service fund] that is an indication of a highly successful program since those programs are funded by user fees,” he said.
The debt service fund took a big jump between 2008 and 2009 and has since been fairly stable at just under $1.7 million for fiscal year 2012. Johnson said this large spike in 2009 occurred because the district completed large upgrades to the heating and cooling systems at Eastview and the middle school during this time. Hoogeveen noted that Monticello’s debt service typically runs higher than state averages, though not alarmingly so.
Another fund that caught the attention of board members was the food service fund balance, which took a big hit from last year going from $62,000 last year to only $9,000 for fiscal year 2012. Food Service Director Joe Happe and Johnson reviewed why this happened, and the main reasons they cited were: higher than anticipated food costs because of rising transportation costs, lower than anticipated a la carte purchases since more students chose the more cost-effective main lunch, unanticipated repairs and higher than anticipated employee costs.
An interesting set of information that comes out of audit reports are the charts showing how the Monticello school district’s budget compares with the state and with other districts its size. For instance, the report shows year after year that Monticello spends less on administration and support services than the state average or its like-sized peers. In 2011 (the latest year for which state averages have been calculated) Monticello spent $490,000 compared to the state average of $852,000 and like-sized peers at $738,000. Monticello’s spending is right in line with others for its spending on regular instruction and slightly higher than others in vocational education instruction.
Monticello’s spending on pupil support services – which includes transportation – and site, buildings and equipment are also lower than average, and spending on special education instruction is markedly lower than state and like-sized school averages, though Johnson said this is deceiving because none of the special education co-op costs, which Monticello is a part of along with four other schools, are included since the co-op has a separate budget category because Monticello shares costs with three other schools. Johnson said that many in-house special education services take place outside of the co-op, such as speech and language services or help for students with emotional-behavioral challenges, but they share a program with other schools for many special education services to make more efficient use of staff.
The fund where Monticello is more noticeably higher than averages is the debt service fund. In 2011 costs to the debt service fund were $1.17 million compared to the state average of $1.10 million and like-sized districts were $1.03 million
Student numbers continue to increase
Another piece of good news for the district was the small but steady increase in the student population. There were 4,086 resident students in FY 2012, up from 4,002 last year and 3,842 back in 2004. 2012 also followed a positive trend that began in 2011 where more nonresidents came in to attend school in Monticello than those resident students who went elsewhere. In weighted pupil units – which accounts for the fact that older students command a higher funding level per student – Monticello had 280 weighted pupil units leave the district to attend school elsewhere compared with 295 coming in from other districts. Just two years ago there were 378 weighted pupil units leaving the district and only 260 coming in.
Recommendations for improvement
While the auditor said there were no misstatements, major issues with management or difficulties completing the audit, there were some accounting compliance observations CliftonLarsonAllen noted that led to a number of suggested changes listed in the audit documents. These include implementing a review process for credit card payments, ensure bank reconciliations are performed timely and reviewed once completed, ensure the district is signing all free and reduced lunch applications, review all new grant requirements and verify they are following them and to review and sign off on all monthly CLiCS reports, which deal with school lunch program usage.
Because of this positive financial news, Superintendent Jim Johnson said the district could finally move to a position of having a few additional dollars available to help the district’s students be career and college ready, which he says is a pre-k through grade 12 responsibility, not just a high school initiative. He said ideas would be forthcoming to help further these goals.
“I remember sitting in the conference room at times, having conversations about whether we would ever get to the base line of our fund balance policy,” Johnson said. “It has been a lot of hard work, and a lot of tough decisions from people across this district. Because of those things we have been doing, we are now in a position where we can really start to move forward. And that’s exciting.”
Johnson said his dream and his goal is to have the Monticello school district set the bar for education in this area.
“I think we are approaching a time where we can make some significant strides towards that,” he said. “We need to be extremely conscientious about how we make decisions; we have to continually look at what our priorities are. If we can manage this in the right way, we’ll do incredible things.”
In other business, the board:
• Heard the End of fiscal year 2012 report from business manager Tina Burkholder, whose numbers line up with the numbers presented by CliftonLarsonAllen for the 2012 audit.
• Approved the 2013-14 levy that was presented at last week’s Truth in Taxation meeting.
• Voted to assign over $2.7 million of the district’s fund balance to several programs: $278,000 to ERRP (Early Retiree Reinsurance Program), just over $2 million to severance and insurance premiums and $410,000 to special education excess cost, which covers the additional special education expenses districts are required to have yet do not receive all the funding for.
• Heard a report about the food service program from Joe Happe, food service director. Happe discussed implementation of the new meal requirements handed down from the federal government. More information on these changes will be coming in a future issue of The Monticello Times.