AUBREY — Results of a recent financial audit were favorable for the Aubrey school district despite a state funding overpayment that could have resulted in a more than $1 million loss had it been overlooked during the 2008-09 school year, an audit report showed this week.

Robert Lake, an independent auditor with Greenville-based Rutherford, Taylor & Co., presented the results to school board members during a board meeting Wednesday night. He noted the Aubrey school board’s numerous revisions of the district’s general fund budget and how the budget was monitored in a way as to not overspend despite an $800,000 overpayment in state funding.

Superintendent James Monaco said that entering the 2008-09 school year the district faced a $300,000 shortfall, not counting the state overpayment. At midyear, district officials realized its average daily attendance wasn’t near what it had projected for the year, he said. In December, it was decided that the district would cut school budgets and supplies, Monaco said. Cash flows and attendance were monitored throughout the remainder of the year, and the midyear action prevented Aubrey from seeing a drop in its bond rating and about a $1.4 million loss in savings, he said.

The overpayment was applied to the 2009-10 school year.

Aubrey finished, the report shows, spending less than what it budgeted for 2008-09 school year by more than $644,000.

“I think it’s just good stewardship,” Monaco said.

The district ended the 2008-09 year on Aug. 31 with more than $4.2 million in its general reserve fund — the savings it carries from year to year. That was an increase of almost $279,000 over the previous fiscal year, according to the report.

The Texas Education Agency recommends that school districts have at least three to four months of operating funds in their fund balances in case of an emergency. It’s recommended that Aubrey have an optimum fund balance and cash flow of more than $3.7 million for emergency operating costs, the report said.

Monaco said he was pleased to see a clean audit and available funds in the district’s bank account.

“As we say in Aubrey, America, you can do a lot of things, but you’re not doing anything without money,” he said.

Local property taxes accounted for 46 percent of district revenue in 2008-09, the report showed, while 36 percent of its funding came from the state. The rest came from investment earnings, grants, contributions and charges for services. To earn additional state funding, the district would have to obtain a grant or increase student enrollment, Lake said.

Overall, he reported no findings of noncompliance and gave Aubrey an “unqualified opinion,” his highest mark. The cost for district programs remained unchanged from the previous year, and no new programs were added.

School board member Ron Bullock, who led Wednesday’s meeting in the absence of board president Mike Sessions, said the report confirmed what board members already believed: that the district is financially sound. He complimented the administration and his fellow board members for ensuring the continued financial stability of Aubrey’s schools. Bullock said that in the current global economic downturn, several districts have had to cut staff, personnel and programs offered to students.

Aubrey was fortunate to not experience such circumstances, yet it was able to cut back in some areas and still offer the best services to its students while remaining financially healthy, which is something that should be recognized by residents and taxpayers, Bullock said.

“That’s not something to take lightly,” he said.

BRITNEY TABOR can be reached at 940-566-6876. Her e-mail address is btabor@dentonrc.com.

IN OTHER ACTION

Aubrey school board members unanimously extended Superintendent James Monaco’s contract one year in a 6-0 vote Wednesday. School board member Ron Bullock, who led Wednesday’s meeting in the absence of board president Mike Sessions, said Monaco’s salary would be discussed later this year when the district puts together its budget for the 2010-11 school year.