Annual Financial Report Finds School District in the Black

The Lacey Township School District earned a positive financial review for last school year, according to its annual audit.

“The district is solvent, which of course is the first measure that you look at,” Frank Holman, certified public accountant, said during a school board meeting. “Our balance sheets show that we’re in very good shape. You have a clean audit opinion which means that after all our audit testing, your numbers are fairly presented.”

The audit revealed two findings: the treasury and board secretary reports were not reconciled to each other on a timely basis which caused the general ledger not to be fully adjusted, and there were weaknesses in the district’s internal control system regarding the student activities accounts.

“We believe they’re minor [findings] but nevertheless, the state asks that we report,” Holman said.

Holman said the numbers were correct in the treasury and board secretary reports but should coincide with each other on a monthly basis.

Business Administrator James Savage assured that money is not missing.

The cafeteria and community education general ledgers used to be maintained separate from the treasury department, Savage said.

This year, the accounts were brought into the general ledger, he said.

“This year, we’re running them through the system here and when we did the journal entries for them, we didn’t bring everything over properly,” Savage said. “It’s not something we ever did before. It was something new to us.”

The ledger has since been brought up to date, he said.

As for the student activity funds, Holman asked the district to “beef up” their internal controls for the middle and high schools, Savage said.

“That is something that’s fairly common in school districts,” Holman said. “The student activity funds are a little bit farther than your central administration. But that’s a good remedy as well.”

A middle school employee became ill and there wasn’t a backup to take care of the student activities account, Savage explained.

“The principal and vice principal agreed to have a backup and deposit funds timely,” he said.

Savage also met with high school administration last week to discuss the same issue.

“That’s a much bigger account,” he said. Savage asked that they make deposits within 48 hours, cancel all outstanding checks, and put money back into the account.

Holman pointed out that the district’s revenues exceed its expenses with a net income of $595,000.

“That really demonstrates how tight your district is running,” he said. “At least it’s a positive number."

The district was $4,166,000 under budget and is left with $1.4 million on hand.

"No $70 million businesses runs with $1.4 million left,” Holman said.

Final numbers provided by Holman are as follows:

• The district has assets from June 30, 2011 of about $66 million.
• The district owes more than $52,910,000 million in liabilities.
• Net asset of $13.2 million
• The district will pay off about $3,371,000 of those liabilities this year
• The income statement shows $70,466,000 in revenues and $69,871,000 in expenses.
• There’s a net income of $595,000.
• The district was $4,166,000 under budget with a surplus position of $1,402,000 and is left with $1.4 million on hand.

Rather than returning for an annual report, Holman will be back in the spring to present a mid-year report for the school board.