UNION COUNTY — The Union County School District ended the 2016-2017 school year with a fund balance that increased by more than $300,000 to more than $2.4 million.
At its November meeting this past Monday, the Union County Board of School Trustees were presented with the results of the annual audit of the district’s finances. Chief Financial Officer Lynn Lawson said that the audit was conducted by McGregor & Co. and presented to the board on the company’s behalf by Harris Darver. He said that in his presentation, Darver described the audit as a “clean” one that found no problem with the district’s finances.
“He reported it was a clean audit and that there were no findings,” Lawson said Thursday. “They (McGregor & Co.) tested our compliance with all federal and state funds as well as issued a clean opinion on the financial statements recorded and reported by the district.”
Lawson said that Darver reported that the district ended the 2016-2017 school year with a general fund balance of $2,416,413. He said that this was an increase of $321,538 over the previous year.
While the district’s fund balance increased from the end of the 2015-2016 school year to the end of the 2016-2017 school year, Lawson said the balance is still far from the district’s ideal balance and just barely meets the amount required by state law.
“The legislature passed a law in May that dictates the amount of fund balance districts and agencies should have on hand,” Lawson said. “They test those requirements and while we met the requirement we barely met it. To some people $2.4 million sounds like a lot, but we’re basically at the minimum of what we should have to meet the state’s expectations of a healthy fund balance.”
What would a healthy fund balance for the district be? It would, according to Lawson, be nearly $2 million more than the district’s current fund balance.
“Our goal is to have a minimum of 15 percent of our annual operating budget,” Lawson said. “So our goal should be at least $4.3 million. That would be our ideal balance. We are essentially at our minimum to meet state law.”
Even though the district does not have the ideal fund balance it desires, Lawson said the audit nevertheless found the district to be in good financial shape.
“Overall, a very positive report, a very complimentary report, and a good audit,” Lawson said.
In other business, the board voted to approve a five-year capital improvements plan presented by Lawson who said the first year would be about addressing deferred maintenance projects.
“This has been our goal for some time and is an initiative of (Superintendent) Dr. Roach as well as a recommendation from the AdvancED Accreditation,” Lawson said. “Year one will focus on items of deferred maintenance, items that we have not previously addressed because of the expense.
“There will be repairs and replacements to address safety and security needs,” he said. “The remainder of the plan will address painting, floor covering, and paving.”
The first year will see a total of $2 million spent on addressing the deferred maintenance needs of the district. As for years two through five, Lawson said they will focus on the district’s construction needs.
Lawson said the plan will actually be one of continuous improvements, explaining that at the beginning of the second year of the plan approved by the board, district staff will bring back a new plan that will add another year. He said plans are for this to be done each year so that the five-year plan is continuously amended to allow the district to continue to address both new and existing capital improvement needs.
The majority of the capital improvements will be paid for with funds allocated to the district by the state.