Transcript MINNEWASKA SCHOOL DISTRICT #2149

AUDIT
HIGHLIGHTS
YEAR ENDED JUNE 30, 2013

Audit Opinion- “Unqualified Opinion” audit report Pages
2-3
District’s Financial Position Improving!
Figure A-3
Sources of Minnewaska Area School's Revenues
Fiscal Year 2013
Miscellaneous Local
1.1%
PropertyTaxes
19.5%
Charges for Services
9.2%
Federal & State Aids & Grant Programs
70.2%
Year Ended
June 30, 2013
Local Sources
Property Taxes
Interest earnings
Other
State sources
Federal sources
Other Financing Sources
Total General
Fund Revenue
$
1,697,140
8,338
1,167,743
10,035,296
501,046
62.374
$ 13,471,937
Year Ended
June 30, 2012
$
Amount of
Increase
(Decrease)
%
Increase
(Decrease)
1,635,425
7,910
1,285,209
10,038,479
687,339
8,051
$
61,715
428
(117,466)
3,183
(186,293)
54,323
3.8%
5.4%
(9.1)%
0.0 %
(27.1)%
674.7%
$ 13,662,413
$
(190,476)
(1.4)%
Figure A-4
Minnewaska Area School's Expenses
Fiscal Year 2013
Administration & District Support
4.2%
3 Others
8.8%
District Support Services
1.9%
Site, Buildings, Equipment
13.0%
Pupil & Instructional support
7.4%
Instructional support services
1.0%
Community Ed
2.0%
Exceptional Instruction
28.2%
Direct Instruction
33.1%
Vocational instruction
0.4%
Year Ended
June 30, 2013
Salaries
Employees benefits
Purchased services
Supplies & material
Non-Capital equipment
Capital Expenditures
Debt Service
Other expenditures
$
7,256,717
1,720,497
2,781,489
732,101
129,125
170,494
243,295
60,074
Total Expenditures
$ 13,093,812
Year Ended
June 30, 2012
$
7,404,398
1,713,318
2,658,849
667,102
143,689
99,353
224,865
69,566
$
$ 12,981,140
$
Amount of
Increase
(Decrease)
(147,681)
7,179
122,640
64,999
(14,544)
71,141
18,430
(9,492)
112,672
%
Increase
(Decrease)
( 2.0)%
0.4%
4.6%
9.7%
(10.1)%
71.6%
8.2%
(13.6)%
.9%
Fund Balances (Deficits)
Total
Nonspendable
2013
Change
2012
323,491
246,632
76,859
264,290
328,550
(64,260)
Community Education
11,716
9,595
2,121
Staff Development
23,930
33,118
(9,188)
1
1
-0-
313,101
344,063
(30,962)
1,962
6,016
(4,054)
-0-
1,395
(1,395)
273,261
160,173
113,088
888,261
882,911
5,350
478,322
478,322
-0-
-0-
171,602
(171,602)
26,799
-0-
26,799
26,799
171,602
(144,803)
Unassigned General
997,051
614,619
382,432
Food Service
(26,323)
5,503
(31,826)
$ 2,687,581
$2,399,589
287,992
Restricted for:
Debt Payment
Deferred Maintenance
Operating Capital
Gifted and Talented
Safe Schools
Severance &
Retirement
Total Restricted
Committed to:
Separation
Assigned to:
Retirement
Music Department
Total Assigned
Total Fund Balances
Fund balance is divided into five classifications:
 Nonspendable Not in spendable form
 Restricted Fund balance is reported as
restricted when constraints externally
imposed
 Committed Can be used only for the specific
purposes imposed by a formal action
(resolution) of the School District Board of
Education
 Assigned Intended to be used by the School
District for specific purposes
 Unassigned All spendable amounts not
contained in the other classifications
Current = Aprox. $1 million
Ideal = Aprox. $2 million
"A budget tells us what we can't afford,
but it keep us from buying it."
— William Feather
Budgeted Amounts
Original
Final
Actual
General Fund
Over (Under)
Budget
$
Revenues
Local property tax levies
Other local and county revenues
Revenues from state sources
Revenue from federal sources
Sales and other conversions of assets
Insurance recovery and settlement
Total Revenues
$ 1,723,894
$ 1,718,909
$ 1,697,140
795,174
1,018,101
1,107,944
89,843
9,890,364
9,939,359
10,035,296
95,937
520,150
501,421
501,046
(375)
41,634
67,695
68,137
442
-0$12,931,216
(21,769)
-0-
-0-
-0-
$ 13,245,485
$ 13,409,563
$ 164,078
General Fund Expenditures
Current:
District and school administration
District support services
Regular instruction
Vocational instruction
Exceptional instruction
Community education and services
2013 Budgeted Amounts
Original
Final
2013 Actual
General Fund
Over
(Under) Final
Budget
$ (18,589)
$ 570,055
$ 646,873
$ 628,284
298,460
264,670
266,172
1,502
4,850,662
4,846,392
4,857,328
10,936
58,294
59,166
59,739
573
4,136,532
4,283,170
4,339,035
55,865
-0-
-0-
-0-
-0-
121,386
113,765
122,948
9,183
Pupil support services
1,142,201
1,121,730
1,127,854
6,124
Site, buildings and equipment
1,141,105
1,102,830
1,089,123
(13,707)
62,463
60,395
60,395
-0-
12,381,158
12,498,991
12,550,878
51,877
188,800
234,831
299,639
64,808
Principal
117,555
128,967
128,251
Interest
110,045
109,788
110,011
6,350
5,033
5,033
-0-
Total Debt Service
233,950
227,241
243,295
(493)
Total Expenditures
$12,803,908
$12,977,610
$ 13,093,812
$ 116,202
Instructional support services
Fiscal and other fixed cost programs
Total Current
Capital Outlay
Debt Service:
Debt issuance costs
(716)
223
Budgeted Amounts
Original
Excess (deficiency) of revenue over expenditures
Variances with
Final Budget
Favorable
(unfavorable)
Actual General
Fund
Final
127,308
267,875
315,751
47,876
Sale of real property and equipment
-0-
-0-
-0-
-0-
Capital Equipment Lease
-0-
-0-
62,374
62,374
Other Financing Sources (Uses)
Total Other Financing Sources (Uses)
Excess (Deficiency) of Revenues and Other Financing
Sources Over (Under) Expenditures and Other
Financing (Uses)
Fund Balances - Beginning of Year
Fund Balances - End of Year
$
-0-
-0-
$
62,374
267,875
$
378,125
$ 110,250
2,032,924
2,032,924
$
2,032,924
-0-
$ 2,160,232
$ 2,300,799
$
2,411,049
$ 110,250
$ 127,308
$
$
$
62,374
The property tax shift is an accounting entry that takes a portion of the
school district's property tax revenue and moves it forward one fiscal
year, i.e., taxes that would otherwise be revenue for fiscal year 2014
are shifted into fiscal year 2013. This shift replaces state aid that will
be repaid at some future date. The property tax shift requirement is in
Minnesota Statutes, section 123B.75, subdivision 5.
:
Early
Retirement
Incentive
(Severance)
Plan
2013
2012
$653,814
$638,495
The District has reserved and committed fund balance
to cover this liability.
The District’s annual OPEB cost, the percentage of the annual OPEB cost
contributed to the plan, and the net OPEB obligation are as follows
PostEmployment
Insurance
Benefits
Fiscal Year Ended
06/30/2013
06/30/2012
06/30/2011
06/30/2010
06/30/2009

Annual OPEB Cost
$
253,844
$
246,626
$
$
$
135,537
126,471
184,629
Percentage of Annual OPEB
Cost Contributed
0.0%
0.0%
Net OPEB Assets
$
696,972
$
950,816
0.0%
0.0%
739.8%
$ 1,195,642
$ 1,333,179
$ 1,459,650
In less than 3 years OPEB Fund will have no assets remaining .

Corrected
Deficiency 2012-1 Ineligible students were being
provided services by Title I teachers
Deficiency 2012-2- Controls did not detect that ineligible
students were receiving free and reduced meals & some
students should have received free and reduced
benefits, but didn’t.
Deficiency 2012-3 – Documenting Time Charged to
Federal Programs
Work in Progress
Deficiency 2012-4 – Period End Financial Reporting
Process
The audit requires separate reporting on our consideration of Internal
Controls and Compliance.
Control deficiency is when the design or operation of a control does
not allow management or employees, in the normal course of
performing their assigned functions to prevent or detect financial
misstatements on a timely basis.
Material Weakness
Reasonable possibility that a material misstatement of the
financial statements will not be prevented or detected by the
District’s internal controls.
Significant Deficiency
Deficiency, or a combination of deficiencies, in internal control that
is less severe than a material weakness, yet important enough to
merit attention by those charged with governance."

Internal Controls & Compliance Reporting Pages 65-66
MATERIAL WEAKNESS
Deficiency 2013-1 Day Treatment Billings. Page 70
SIGNIFICANT DEFICIENCY
Deficiency 2013-2 – Period End Financial Reporting Page 71
STATE COMPLIANCE Page 69
No performance bond obtained on janitorial maintenance contract
FEDERAL AWARDS COMPLIANCE Page 62
No deficiencies noted




The District has improved its financial position in the past year.
Need to continue to strengthen its fund balances.
The District needs to continue to closely monitor its accounting
for revenues & expenditures related to Day Treatment & Special
Ed. Billings need to be done in a timely manner with proper
oversight. Once payments for the prior year are finalized the
current year budget should be reviewed as actual receipts can
vary from estimated receipts.
The District needs to monitor its rising unfunded OPEB actuarial
accrued liability and consider how it is going to fund the coming
deficit. Also consider using General Fund assets instead of OPEB
assets for future retirement incentives.
The District needs to balance the need for capital maintenance
with taking on additional debt.

Thanks to the District Staff for their
cooperation during the audit.