District 518 receives positive audit report
Auditors say the district is in strong financial position with more than $14 million remaining, unrestricted funds in the general fund.
WORTHINGTON — Independent School District 518 remains in a strong financial position, auditor Ellen Hoefker shared with Board of Education members during their regular Tuesday meeting.
The school board on Tuesday unanimously approved the audit report, which examined the district’s financials from July 1, 2018 through June 30, 2019.
The district received a “clean, unmodified” opinion from firm Drealan Kvilhaug Hoefker & Co., P.A.
“Overall, the general fund is looking really good,” said staff accountant Doreen Harrold during the initial audit presentation made last week to the board’s instructional committee. “Revenues were greater than budget, expenditures were less than budget.”
District 518 Superintendent John Landgaard said the audit report was very good overall.
“We were able to manage the budget well to support our students' education,” he said.
According to the audit, at the conclusion of the fiscal year, the district’s general fund had a total balance of $34,475,971, which is approximately $7 million more than at the beginning of the district’s previous fiscal year.
The general fund includes statutorily restricted funds ($4.3 million), unrestricted funds ($14.6 million), non-spendable amounts ($446,295), committed funds ($149,865) and assigned ($15 million).
Of the $15 million assigned funds, $12.5 has been set aside for a new community education facility, which is currently being planned as part of the collaborative Welcome, Education, Library and Livability project.
The growth of the general fund has largely been due to increased student enrollment and budget management, Landgaard said. Harrold reported the district received $1.6 million more in revenue than the previous year due to increased student enrollment.
Four unfilled staffing positions played a significant role in leading to an under-budget figure in the general fund expenditures, Landgaard said.
It’s the district’s policy to reserve a minimum 10% of the budget to cover monthly cash flow, and the board typically board aims to reserve no less than $7 million for cash flow.
Annual revenue, expenditures (combined funds)
In 2019, the district has overspent its total revenue by about $5.7 million ($59,048,995 revenue / $64,711,187 expenditures). According to the audit, the budget deficits occurred in the capital projects/building construction and debt services funds.
Landgaard noted that construction, particularly of the new learning center and gymnastics facility, and a series of bond payments skewed the expenditures. Last year, the board authorized paying off remaining debt related mostly to a 2010 middle school project to eliminate debt from taxpayer rolls.
The difference will be covered by the district’s budget reserves.