2021-22
Financial Audit Overview October 11, 2022
Highlights
1. Financial Analysis a. Reserves/Fund Balances b. Other Funds Update
2. Findings/Corrective Action 2
Financial UpdatesRevenues & Expenditures in the General Fund Budget
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Revenues
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Sales Tax outpaced budget expectations State aid paybacks from previous fiscal year $6,632,318 to the positive on the revenue side 3.6% variance in actual vs. budgeted revenue
Expenditures
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Majority of federal stimulus spending double booked creating surplus on the instructional side Multiple unfilled support staff positions Staffing shortages create more surplus in benefits $9,146,241 to the positive on the expense side 5% variance in actual vs. budgeted expenditure ■ Spent 95% of the budget 3
Financial UpdatesFund Balances
Fund Balance
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Total General Fund Balances up $9,010,335 ➢ Reserves added $10,335 in interest ➢ $9,000,000 in equity transfers ➢ Total Fund Balance: $48,251,485 ➢ 25% of 2022-23 Budget Total Debt Service Fund Balances up $360,602 ➢ $2,069 in interest ➢ $358,533 in premiums on borrowings ➢ Total Fund Balance: $3,516,567 Total School Lunch Fund Balances up $1,677,141 ➢ Revenues outpaced Expenditures ➢ Total Fund Balance: $2,379,893 4
Other Funds
School Lunch ✓
✓ ✓
Financially positioned to weather the next storm with minimal if any impacts to operations/staffing Will free meals come back? Other impacts ○ Labor Market ○ Styrofoam Ban ○ Product shortages
Other Funds Special Aid ✓ ✓
Reversed deficit A lot of activity due to federal grants
Debt Service ✓
Additional earnings due to short term borrowing for one more year
Capital Fund ✓
Still running a deficit and borrowing from the other funds as work is ongoing
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2021-22 Audit Findings
During our examination of separation payments, we noted the District has a procedure in which the payments are calculated by the Human Resources Clerk, reviewed by the Human Resources Director and subsequently paid through payroll which is certified by the Business Official. Although the calculations are reviewed, there is not a sign off by the Human Resource Director to document the calculations are consistent with contract language and other reports.
The District will update its process to include the following. Currently every retiree receives an all encompassing letter with separation and benefits information included. Included in this process we will add a check off to the form that goes to all retirees. One check off will be consultation with the HR clerk, second check off will be years of service verification by another HR staff member, and finally a third check off by the business department staff that has been reviewed. A copy of the letter will be sent to the retiree with the information and then another copy will be placed in their permanent file. This corrective action will be completed by the audit for fiscal year 2023.
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2021-22 Audit Findings
During the course of our examination, we noted that the fund balance in the School Lunch Fund at June 30, 2022 totaled $2,326,165. This balance appears to be in excess of the three months average expenditures level recommended by Federal Regulation #7CFR Part 210.09, in the amount of $1,172,505.
The District Food Service Department is aware of the excess fund balance for fiscal year 2021-22. The previous four years saw losses in the following manner: 2018-19: ($165,063) 2019-20: ($641,630) -Structural Program Deficit 2020-21: 759,391 Elimination of Structural Deficit The yearly average loss from 2009-10 until 2020-21 amounted to ($267,797) per year. This one year increase due to universal free breakfast and lunch will set the program up for the next ten years of losses with the elimination of the free meals program. The food service leadership team will continue to monitor monthly reports on participation, revenues, and expenditures throughout the 2022-23 year to more closely monitor the fund balance situation. Some immediate action items to address the excess will be investment in equipment, employee training, employee retention programs, and additional staffing to assist in meal development. The action plan will be implemented during fiscal year 2022-23 and adjusted throughout the year with completion set for the Summer audit of 2023.
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Completed Items from 2020-21 Audit
WonderCare Revenue During the 2021-22 fiscal year the District’s Special Aid Fund had an operating gain in the WonderCare Program, which resulted in a positive fund balance at June 30, 2022.
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Upcoming Audits November To March Time Frame
Looks at all federally funded programs
▪ Extraclassroom Audit - Looks at the secondary school building accounts
▪ Internal Audit - Working on identifying an area for review (recently completed below) -
Technology Aquatics Center HR/Benefits Process 9
Thank you very much for your time! ▪ Questions or Comments
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