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This graph shows the school district's general fund revenue by source. (Source: Eide Bailly)

Menahga School is healthy financially

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news Park Rapids, 56470
Park Rapids Enterprise
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Park Rapids Minnesota PO Box 111 56470

The Menahga School district is in good shape financially, with a $1,446,529 fund balance.

"Overall, I think you're doing a pretty good job," Brian Stavenger of Eide Bailly told school board members Tuesday as they accepted the audit report.

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Expenditures came in about 4 percent over budget, but some of the money spent on this year's $500,000 ventilation project was used from revenues allocated at the end of the last fiscal year.

"Expenditures compared to last year is a little misleading because of the timing the revenues came in," Stavenger said.

The 13 percent increase from 2008 includes capital expenses, which if taken out of this year's audit, would put the district at 1 to 2 percent over budget instead of the reported 4 percent.

"If you're within 1 to 2 percent on your expenditures, that's a pretty darn good job of budgeting," he said.

Revenues came in at $6,653,256, about 1.5 percent or $100,000 under budget, partly because of state aid cuts.

But Menahga's $1.4 million fund balance is healthy enough to move forward, although it's not at the recommended 20 to 25 percent of operating revenue, Stavenger said.

And the board's policy is to end up with 25 percent, or about $1.8 million in its fund balance.

"Although you're not at where you want to be ... you're sitting a lot better than a lot of other districts in the area and across the state," he said.

However, board members expressed concerns with the anticipated reductions in state aid.

For fiscal year 2009, aid payments totaled about 90 percent during the year with the remaining 10 percent being paid in the subsequent fiscal year.

Beginning fiscal year 2010, aid payments will be reduced to 73 percent during the year with the remaining 27 percent withheld.

Instead of the half a million dollars that were withheld until after this fiscal year ended, the new state policy will triple that amount for Menahga in the future.

"As you go throughout the year, just remember there is going to be less money given to you during the year," Stavenger said.

Superintendent Mary Klamm said what the board has been hearing from legislators is the district may never see that 27 percent that the state is planning to withhold during the year.

"I guess you can never say never," Stavenger responded, adding that schools could suddenly be put in similar unalloting situations that some cities experienced this year.

"This is a shift in the formula and boy I would hope that they would own up to what they have said they would pay you," he said. "It's the great unknown."

According to the audit report, in 2007-08, state aid totaled 85.6 percent; federal was 3.4 percent; local was 4.1 percent and other sources totaled 6.9 percent.

In 2008-09, state aid was 86.4 percent; federal totaled 3.3 percent; local came in at 4.7 percent and other sources were 5.6 percent.

From 2009 to 2010, funds are expected to remain similar to the past couple of years, but there could be more challenges in the future.

"What's going to happen in the next few years," Stavenger said, "that's where it gets scary."

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