A delayed audit of Starkville School District’s Fiscal Year 2012-2013 shows the district spent more than it received, and auditors advised school board members to be mindful of tapping into its reserves as combined local, state and federal revenue amounts fluctuate during Tuesday’s board meeting
A draft of the Belzoni-based Cunningham CPAs’ report showed a trend of SSD’s expenditures overtaking revenues continued as the district took in about $43.15 million in combined income from local, intermediate, state, federal and 16th section sources and spent a combined $45.41 million on instruction, support services, debt service and other line items in the fiscal year that ended June 30, 2013.
Additional financing sources, including capital leases and property sales, brought the deficit up to $1.46 million.
Citing prior audits, the report showed the district overspent its revenues each year since 2010. Then, the district collected $43.95 million and spent $53.17 million, or about a $9.22 million difference. Almost $11.58 million worth of bond proceeds meant the district showed a $2.35 million net addition to its ending fund balance on paper.
In 2011 and 2012, however, the district’s combined balances from all governmental funds decreased $1.84 million and $3.73 million before minor prior-period adjustments.
The net result of those decreases and the last dip means SSD’s those same balances dropped from 2010’s $12.59 million mark to $6.13 million on June 30, 2013.
Specifically, SSD’s ending general fund balance has decreased from $2.5 million to $1.07 million across the same timeframe.
Since 2010, SSD trimmed its expenditures from $53.17 million to 2013’s four-year low mark. Combined revenues hovered within the $43 million range during the same timeframe.
In all, SSD spent an average of $11,303 per pupil in 2013.
SSD has leaned on local taxpayers more in the recent as federal funding was cut from 2011’s four-year high of $8.75 million to 2013’s $6.54 million contribution. In 2010, local taxpayers gave the district $16.11 million in revenue, but that total increased to $17.87 million last year.
Intermediate, state and 16th section revenues have also declined about $9,000, $340,000, and $98,000, respectively, from 2010’s totals.
Instructional costs, including teacher pay, remained the district’s greatest expense despite coming in at a four-year low of $23.28 million in 2013. Support services and non-instructional services were the next highest expenses and cost SSD almost $20 million combined. Costs with support services have increased about $1.5 million compared to 2010’s $13.21 million mark, while non-instructional services have decreased by about $700,000 in the same time frame to almost $4 million.
The district’s combined debt service — principal, interest and other costs — increased in 2013 to $3.04 million compared to 2012’s $2.86 million but fell short of 2011’s four-year high of $3.08 million in combined payments.
Without debt service, SSD would have taken in more money than it spent in 2013.
Auditors gave the school district a clean opinion — no money was deemed missing — but their report did list five material weaknesses. SSD’s activity funds and district maintenance accounts were overstated by $428,092 and $52,343, respectively, while its payroll clearing account was understated by $102,859.
Those errors would have been caught, the report stated, if bank reconciliations were completed in a timely fashion.
Other additional audit adjustments were needed after the report found: June 2013 ad valorem taxes from Starkville had not been accrued and required an audit adjustment of $315,757; the district failed to include $104,000 in accounts payable at the end of the fiscal year; SSD failed to accrue July 2013’s teacher payroll of $1.85 million; and multiple federal grants with cash advances were recognized as revenue.
No significant deficiencies or non-compliance issues were found in the audit, but the report recommended SSD implement better internal control policies to ensure financial accountability.
“Greater care needs to be taken to ensure that all transactions of the district are captured, properly recorded, and that the account records agree to the subsidiary ledgers and reconciling schedules,” the report stated.
Carl Smith covers Starkville and Oktibbeha County for The Dispatch. Follow him on Twitter @StarkDispatch
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