The Park Rapids School Board approved an audit report Monday that gave the district’s financial statements an unmodified, or “clean,” opinion for the fiscal year ending June 30, 2019.

Mary Reedy, a principal with CliftonLarsonAllen LLP (CLA), said this is “the highest level of assurance that auditors can give.”

Reedy noted that the audit took only two days to complete, thanks to cooperation from district staff.

In an audit of federal programs, CLA also gave the district an unmodified opinion, noting one “significant deficiency” – a lack of quotes for procurement, which Reedy said was already corrected.

“Some new guidelines came down from the federal government,” she said. “It takes a little bit to implement overall.”

Reedy said the school’s average daily attendance rose from 1,638 in fiscal 2018 to 1,670 in 2019, with increases of 15 to 16 students at both elementary and secondary levels.

Weighted average daily attendance – adjusted in proportion to special needs such as English proficiency, disability and poverty – rose from 1,776 in 2018 to 1,811 in 2019.

Since the weighted average is used to calculate state funding levels, Reedy said, “Your student increase also increased your revenues.”

The district’s total revenues in fiscal 2019 were $20,113,783, up from $19 million in 2018 and about $986,000 over budget. “A lot of that is due to your student increase,” said Reedy.

Expenditures totaled $19,469,899, an increase from $19.2 million in 2018 and about $134,000 under budget. The net change in the general fund balance was a positive $648,000, whereas the district budgeted for a loss of about $467,000.

The amount per student that the district spent in 2017-18 on administration was lower than both the state average and the average for school districts of similar size, Reedy reported. While state and comparable district figures are not yet available for 2018-19, she said the district spent less per student on administration last year than the year before. She also attributed this to the increased student count.

Meanwhile, she said, the amount per student that the district spent on instruction has been consistently above the average for comparable districts, but below the overall state average. That amount has increased each year since 2014-15, exceeding $8,000 for the first time last year. “That means the dollars are going back into the classrooms,” said Reedy.

Fund balances

The unassigned fund balance, as of June 30, was $4.76 million, which Reedy explained is money to pay for the district’s normal, day-to-day operations. Compared to the total expenditures, this comprised a reserve of about 24.5 percent.

Nonspendable fund balance, which Reedy described as any prepaid or inventory items, was $148,000, down from $156,000 last year.

Restricted fund balance, including operating capital and long-term facilities maintenance (LTFM), came to $2.8 million, an increase of almost $500,000 from last year. Reedy said the increase in LTFM funds “comes also with your increase in student count.”

Committed fund balance, which includes severance and retirement benefits, totaled $784,241 and was unchanged since 2018.

Other assigned general fund balances, including money set aside for heating and cooling system updates, technology upgrades and future equipment, totaled a little over $1 million, down almost $250,000 from last year.

Restricted accounts outside the general fund totaled about $79,000 and included funds earmarked for such items as the scoreboard.

Reedy noted that the restricted and unassigned fund balances have both increased steadily since at least 2015, while the other fund categories have stayed approximately level.

During fiscal 2019, food service had over $1 million in revenue (about $70,000 over budget) and approximately $955,000 in expenditures (about $6,900 under budget). The food service fund ended the fiscal year with a balance of $538,671, a positive net change of $96,144 on the year.

“I believe the district is coming up with a plan to help spend down some of that food service money,” said Reedy, adding that food service should operate more evenly and not build up a large fund balance.

Community service, which includes the Community Education, Early Childhood and Family Education and School Readiness programs, ended the year with a fund balance of $239,885. These programs’ net revenue totaled $13,000, about $68,000 lower than expected.

The debt service fund expended $3.8 million more than it took in during fiscal 2019, ending with a restricted balance of approximately $651,000.

“You did pay off your old bonds,” Reedy explained, adding that debt service revenues are enough for expenditures.

“The district is required to levy 105 percent of those principal and interest payments each year,” she said. “Debt service is operating as it should.”

Board member Dennis Dodge moved to approve the audit report, and the motion carried unopposed.

Board member Stephanie Carlson moved to approve the district’s audited revenues and expenditures budget for fiscal year 2019 and the projected budget for fiscal 2020. Business manager Kent Fritze said the budgets will be published in the Enterprise and the district’s website. Carlson’s motion passed without dissent.