The Park Rapids School Board on Monday approved the district’s audit for fiscal year 2020, which ended June 30, 2020.
Mary Reedy, certified public accountant with Clifford Larson Allen LLP, presented the firm’s audit of the school district’s 2019-20 financial statements.
Reedy said the district’s accounting staff was cooperative and helpful, personnel and records were available, and the only material adjustment made was a corrected misstatement, due to a debt service payment that wasn’t recorded at the time.
Also, she noted that student activities and scholarship monies have been moved into restricted accounts within the district’s general fund.
Material weaknesses found during the audit included the usual comment about segregation of duties – “You do have good mitigating controls over those,” Reedy said – and the fact that the auditor drafts the financial statements, subject to business manager Kent Fritze’s review.
Nevertheless, the audit resulted in an unmodified, or “clean,” opinion, Reedy said. The district also received clean findings in a single audit of federally funded programs and regarding state legal compliance.
Reedy reported that the district’s weighted average daily membership – a measure of enrollment used in state funding formulas – decreased to 1,785 in fiscal 2020 from a five-year high of 1,811 in fiscal 2019, though high school enrollment was higher than the previous year.
General fund revenues for fiscal 2020 totaled $21,086,970 and expenditures totaled $20,147,035. The general fund ended the year with a fund balance of $11,291,142, a net increase of over $1 million. Comparing this to a budgeted change of $254,000, Reedy called this a “very positive” result.
Reedy further broke this general fund balance down into:
$5.5 million in unassigned funds – enough, she said, to pay the district’s bills for four months without any other revenue;
$83,000 in nonspendable funds – “anything related to inventory or prepaid items”;
$4 million in restricted funds – including student activities, scholarships, operating capital and long-term facility maintenance;
$784,000 in committed funds – severance pay; and
$844,000 in assigned funds – including monies for technology updates, heating, ventilation and air conditioning upgrades and future equipment.
Moving on to other funds, the food service fund ended the fiscal year with about $947,000 in total revenues and $1 million in expenditures, and its fund balance decreased almost $100,000 to an ending balance of $439,195.
The community service fund saw revenues totaling about $806,000 and expenditures of about $890,000, resulting in a net decrease of about $84,000 to a final fund balance of $167,458. Restricted funds under community service, including the Community Education, Early Childhood and Family Education and School Readiness programs, totaled $112,237.
The debt service fund ended fiscal 2020 with a restricted fund balance of $863,486, after total revenues and expenditures in the neighborhood of $2.7 million. Reedy said the fund is operating just as it should, adding, “The state monitors that. If your fund balance gets too high, they’re going to reduce your levy.”
Reedy said the decrease in the debt service fund’s cash balance since fiscal 2017 and 2018 is because the district paid off some bonds.
The district has spent less in recent years on administration and district support services compared to the state average and other districts of similar size, Reedy said. Meanwhile, it has been spending more than comparable districts, though less than the state average, on instruction in proportion to enrollment.
“So, you’re putting the money back into the classrooms. You’re spending it on those students,” she said.
School board member Dennis Dodge moved to approve the audit report. The motion passed by a unanimous roll-call vote.