Denton accounting firm Hankins, Eastup, Deaton, Tonn & Seay recently presented the Denton and Sanger school districts with clean audit reports for the 2011-12 fiscal year.
The districts were issued unqualified opinions, signifying significantly sound finances, and the firm, according to the two reports, identified no findings or areas of noncompliance for either school district.
At the close of the 2011-12 fiscal year, June 30, Denton added more than $13.5 million to its general fund reserves, according to the report presented to the school board Nov. 13. The district finished the year with more than $77.4 million in its general fund reserves. Of the monies in fund balance at the close of the 2011-12 fiscal year, nearly $59.3 million or 32.5 percent is unassigned reserves.
The school district’s fiscal year runs from July 1 to June 30.
For the 2011-12 fiscal year, the district reduced positions, restructured programs, downsized staffing for central service divisions and contracted custodial services to offset the shortfall in its state funding.
Board Member Jim Alexander, at a Nov. 13 board meeting, commended the district staff for their work in being fiscally responsible.
“We are in relatively good shape in spite of the difficulty we’ve been through … and it’s a good thing that we’ve got some sound fiscal footing,” he said.
Some contributing factors to the addition to the general fund reserves, according to the report, included an increase in property tax revenues, a decrease in expenditures and “state foundation and per capita funding.”
District officials have said they intend to allocate the additional money added to reserves to major maintenance items needing attention, such as bus and technology replacements, which have been delayed. Some of the reserves money will also be assigned on a one-time basis to other district programs.
Independent auditor Carl Deaton of Hankins, Eastup, Deaton, Tonn & Seay told board members the district was within the 90 to 100 percent range of the optimum fund balance and cash flow that the Texas Education Agency requires for the district to cover operating expenses in case of emergency.
Board President Mia Price said it’s generally recommended that a district be between the 50 and 150 percent range of the optimum fund balance and cash flow.
According to the report, the district added more than $4.98 million to reserves in its debt service fund, which is used to pay the district’s debt. At the close of the 2011-12 fiscal year, debt service reserves totaled more than $47.1 million. While tax revenues increased by nearly $1.3 million, so did the debt service expenses, which increased by more than $1.6 million, according to the report.
A total of $357,517 was added to the child nutrition fund, according to the report. That brought net assets for the fund to more than $3.4 million at the close of the 2011-12 fiscal year.
Overall, Price said she was pleased with the audit report.
“It was a clean audit, and that’s always our goal is to have a clean audit,” she said. “As we continue to grow, it is very important to maintain our checks and balances with our financial policies, and I’m very proud of the work of our financial office and our purchasing office.”
In June, the district adopted the 2012-13 fiscal budget, which included 3 percent pay increase for district employees. At the time, general fund expenditures were projected to total more than $196.8 million for the year. District officials have said they intend to use $2.7 million in reserves to offset some of the expenses for the 2012-13 year.
During its 2011-12 fiscal year, which ran from Sept. 1 to Aug. 31, the Sanger Independent School District added $668,124 to its general fund reserves. The district completed the 2011-12 fiscal year with more than $7.9 million in general fund reserves.
Superintendent Kent Crutsinger attributes the increase in reserves to an increase in tax collections, student enrollment growth, budget adjustments in which some expenses decreased and utility savings.
At a Nov. 12 meeting, Crutsinger talked of how the district added to general fund reserves while also purchasing several district computers during the 2011-12 year. In his opinion, he said it was “indicative of a pretty solid year.”
“Obviously I was very pleased with the increase in the fund balance with regards to the $668,000 in light of the financial climate we find ourselves in,” he said.
There seems to be a lot of uncertainty with what could occur with public education funding with the next legislative session just months away, Crutsinger said, but he’s confident his district can “weather” anything passed at it.
He said the district will look to use some of its reserves this year to purchase school buses and replace heating, ventilation and air-conditioning systems at some of the district facilities.
Board President Cristy Koonce said there were no surprises with the audit report. From month to month, the board receives a report of where finances stand so nothing came as a surprise. She was excited to add money to the general fund reserves.
Crutsinger said the district met the optimum fund balance and cash flow expected of it. He said the district has money to cover about four months of operating expenses and that Sanger is about $1.4 million to $1.6 million above the optimum range.
Debt service reserves decreased by about $67,000, according to the audit report, and left the fund balance at the end of the fiscal year at more than $956,000. Reserves, Crutsinger said, were used to make a debt payment.
According to the audit the district added $89,515 to child nutrition reserves, bringing the total reserves at the close of the 2011-12 fiscal year to $572,731. Crutsinger said the district has more in child nutrition reserves than what’s expected it should have, and so a spending plan has been created to use some of the reserves money for purchasing equipment and furniture for the district’s cafeterias and kitchens.
In August, the district approved its 2012-13 fiscal budget. General fund expenses are projected to total $18 million. Of the expenses is a 2.5 percent pay increase for teachers and 2.25 percent increase for all other staff. District officials have said they intend to absorb a $70,561 shortfall in its general fund budget with the additional funding it receives from the state for an increase in student enrollment.
Crutsinger said the district is in good shape and up more than 70 students from the 2011-12 school year and tax collection rates are trending positive. There are also new homes coming online in the area, which will add to the tax base and could potentially add to student enrollment growth, he said.
BRITNEY TABOR can be reached at 940-566-6876. Her e-mail address is firstname.lastname@example.org .