Finances for the 2011-12 fiscal year in Krum and Pilot Point districts were clean, according to audit reports recently presented to their school boards.
The reports, each presented last week by representatives from Denton firm Hankins, Eastup, Deaton, Tonn & Seay, identified no findings or areas of noncompliance for either school district. Both districts were issued unqualified opinions, signifying significantly sound finances.
Pilot Point ISD
During the 2011-12 fiscal year, which ended June 30, Pilot Point added more than $1.7 million to its general fund reserves, according to the audit report. That brought its total to more than $5.1 million in reserves.
“We had some revenue come in that we had not planned on,” Superintendent Glenn Barber said.
That additional revenue was $536,050 in impact aid from the federal government. Typically the district is scheduled to receive more than $100,000 annually in impact aid, but some of that aid from previous years was not disbursed until the 2011-12 fiscal year, Barber said.
Other federal funds and lower-than-expected expenses also contributed to the bump in the reserves.
Officials had projected that about $4.8 million in state revenue would be disbursed to the district’s general fund, but the district actually received more than $5 million, Barber said.
The district projected it would receive more than $259,000 in federal programs revenue for the general fund, but actually received $753,695. The district completed the year with a balanced budget.
“We finished better than what we had planned,” Barber said.
Pilot Point met the optimum fund balance and cash flow the Texas Education Agency requires it have to cover operating expenses in case of emergency, according to the report. That threshold for Pilot Point is slightly more than $4 million.
Barber said this is the first time the district has been at or above the optimum fund balance and cash flow in at least a decade. He said during the 2001-02 year the district was at 87 percent of the optimum fund balance.
He said the district was more than $1.1 million above the desired optimum fund balance for the 2011-12 fiscal year. The excess money is being assigned to maintenance and facility repairs, upgrades and improvements, Barber said.
“We’re actually able to do things now that we haven’t been able to do in a long time in improving our facilities,” he said. “That puts you in a position where you can feel comfortable about doing some improvements and making upgrades … that we haven’t been able to do in a long time.”
Looking to the current fiscal year, Barber said there are a lot of “unknowns.” Expenditures in some areas have increased, and funding sources available last fiscal year are either being lowered or are not available this year.
In June, the district adopted a balanced budget with general fund expenditures totaling more than $11.9 million. Included in the general fund budget were an increase in pay per step on the teacher salary scale and an increase in the base salary for beginning teachers, which grew from $36,870 to $38,870, costing the district about $104,000, Barber said.
The current fiscal year started July 1.
Krum ISD
Reserves for the general fund budget in Krum decreased by $965,229, its auditor reported.
The district completed the 2011-12 fiscal year, June 30, with more than $7.8 million in reserves.
Assistant Superintendent Cody Carroll said more than $950,000 in savings was used to absorb a shortfall in the general fund and more than $14,000 was used to absorb a deficit to the child nutrition fund for the fiscal year.
“We did quite a bit of construction over the course of the year,” Carroll said. “With the amount of construction, we knew there would be money coming out of fund balance [reserves].”
During the 2011-12 fiscal year the district completed a new administration building, which opened last November, and the former administration space was remodeled for use as an eighth-grade wing to Krum Middle School. The district also built an addition to the band hall and agriculture building, Carroll said.
The district finished the year as hoped, he said.
“I think just the great management by the superintendent and school board allowed Krum ISD to make significant improvements in our facilities and not hurt the financial stability of our district,” he said.
The 2011-12 audit report indicates the district is more than $3 million off from the optimum fund balance and cash flow that TEA requires for the district to cover operating expenses in case of emergency.
“Even though we don’t have what is categorized as an optimum fund balance, we are more than fiscally sound,” Carroll said. “The auditor made a point to say that in his presentation.”
The district added $377,578 to savings in its debt service fund last fiscal year, according to the audit report. Krum drew more in reserves than what was dispensed for expenses, adding more than $223,000 to reserves. The district also refinanced a portion of its bonds, adding an additional $155,000 to reserves.
The increase in debt service reserves allowed the district to lower the debt service rate by 2 cents, from 50 cents to 48 cents, in September for current fiscal year and save taxpayers money, Carroll said.
Reserves for the child nutrition fund remained unchanged from the beginning of the fiscal year, July 1, 2011, to its end, June 30, 2012, according to the audit report.
Carroll said things look promising for the current fiscal year. In June, the district adopted a balanced budget with general fund expenditures totaling more than $16.86 million. Eight new teachers were added to the payroll to accommodate the district’s student growth.
Carroll said the district has gained 100 new students so far this school year and is conducting a demographic study to determine future growth for the district.
The current fiscal year began July 1.
BRITNEY TABOR can be reached at 940-566-6876. Her e-mail address is btabor@dentonrc.com.
