Financial Analysis of 2012 Audit and Explanation on the District s Financial Reserves November Superintendent Assistant Superintendent

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1 Financial Analysis of 2012 Audit and Explanation on the District s Financial Reserves November 2012 Dr. Scott Martzloff Mr. Thomas Maturski Superintendent Assistant Superintendent

2 Financial Analysis of 2012 Audit Revenue Analysis from the 2012 Audit : Change Budget $150,710,383 $151,804,545 $1,094,162 or 0.7% Final Actuals 151,527, ,820,514 $1,292,983 or 0.8% Variance $ 817,148 $ 990,729 Actual Revenues received by the District increased $173,581 from Variance of $990,729 represents 0.006% of the total revenue budget or ½ of 1% of the $151,804,545 budget. This minimal planning margin shows that the budgeted revenue is at the maximum level and equals actual revenue receipts Note: Excludes Appropriated Fund Balance

3 Financial Analysis of 2012 Audit General Fund Expenditure Analysis from 2012 Audit: Change Final Actuals (GF) 147,385, ,341,423 2,955,637 or 2.0% Transfers (Debt Service) 4,481,594 4,526,130 44,536 or 1.0% Subtotal 151,867, ,867,553 3,000,173 or 2.0% The expenditure change has been controlled to the point that the increase remained at 2.0%

4 Financial Analysis of 2012 Audit Revenues vs. Expenditure Analysis from 2011 Audit Audit Report Statement of Revenues, Expenditures and Changes in Fund Balance Total Actual Revenues $ 152,820,514 Total Actual Expenses $ 154,867,553 Net Change ($ 2,047,039) Use of reserves and fund balance funded revenue deficiency One time contractual items accounted for $2,022,590 After considering the one time contractual payments; actual revenues equaled actual expenditures in the budget

5 Financial Analysis of 2012 Audit Audit Summary and Projection: District s revenue and expenses will continue to be essentially equal Appropriated Reserves will absorb any minor revenue in balances Reserve balances will decrease Reserves ARE being used for their intended purpose Fund program and district expenses on a short term basis Provides time and the opportunity for the District to establish a plan to right size its budget into a long term balanced budget plan

6 Reserves and Fund Balance Definition of Restricted Reserves: Funds deposited in these accounts are legally restricted to support expenses that are within their assigned category Health insurance self funded prescription plan Unemployment unemployment benefit claims Tax Certiorari Article 7 refunds Capital (Building and Bus) Proposition ballot vote required Workers compensation self funded workers compensation claims Repair Board authorized repair reserve expenses (public hearing) Employee benefit and accrued liability Accrued employee payments for sick and vacation time payable at retirement Employee Retirement system (ERS) Payments made to New York State

7 Reserves and Fund Balance Definition of Assigned Reserves: Have been formally assigned for use by the Board of Education for a specific purpose Appropriated Fund Balance Revenue allocation to balance budgets Encumbrances Prior year purchase orders that will be paid in following fiscal year

8 Reserves and Fund Balance Definition of Unassigned Fund Balance: Funds that are not classified or committed for future use Unassigned fund balance New York State limits school districts to a maximum of 4% of their budget 2012 Unassigned fund balance = $6,360, Unassigned fund balance = 3.87%

9 Reserves and Fund Balance Williamsville Central School District Annual Reserve Report As of June 30, 2012 Reserves: Balances Expenses Closed Interest Posted Funding Balances Change in Appropriated June 30, 2011 To Reserve To Reserve To Reserve June 30, 2012 Reserve In Budget RESTRICTED: Health Insurance $ 2,200,491 $ (73,786) $ 108,327 $ 2,235,032 $ 34,541 $ (300,000) Uemployment $ 551,103 $ (88,138) $ 2,012 $ (164,977) $ 300,000 $ (251,103) $ (150,000) Tax Certiorari $ 300,000 $ (5,546) $ 4,121 $ (218,575) $ 80,000 $ (220,000) $ - Capital Projects: Building $ 12,238,475 $ (9,000,000) $ 13,248 $ 242,149 $ 3,493,872 $ (8,744,603) $ - Transportation (Buses) $ 5,778,800 $ (977,816) $ 14,969 $ - $ 4,815,953 $ (962,847) $ - Workers Compensation $ 3,249,296 $ (500,000) $ 11,866 $ 443,652 $ 3,204,814 $ (44,482) $ (750,000) Repair $ 3,627,910 $ (500,000) $ 4,904 $ 38,344 $ 3,171,158 $ (456,752) $ (300,000) Employee Benefit and Accrued Liability $ 11,226,520 $ (755,538) $ 40,995 $ 1,055, $ 11,567,941 $ 341,421 $ (750,000) Retirement Contribution $ 3,466,773 $ (1,200,000) $ 137,178 $ 765,484 $ 3,169,435 $ (297,338) $ (2,300,000) ASSIGNED: Encumbrances $ 2,622,345 NA NA NA $ 2,237,230 $ (385,115) NA Appropriated Fund Balance & Reserves $ 9,974,000 NA NA NA $ 9,974,000 $ - NA UNASSIGNED: Unassigned Fund Balance $ 6,472,503 NA NA $ 100,831 $ 6,360,645 $ (111,858) NA Balance Totals $ 61,708,216 $ (13,100,824) $ 229,293 $ 2,270,368 $ 50,610,080 $ (11,098,136) $ (4,550,000) Capital Reserve Transfers Building and Buses $ (9,977,816) Encumbrance Reduction $ (385,115) Reserve Reduction excluding Capital Reserve $ (735,205)

10 Reserves and Fund Balance Reserve Summary by Category: Total Restricted $32,038,205 Total Assigned $12,184,230 Total Unassigned $ 6,360,645 Total Fund Balance $50,610,080 Note: Change in Fund Balance from to ($11,098,136) Capital transfers = ($9,977,816)

11 Reserves and Fund Balance Clarification 2011 Fund Balance and Reserve Analysis: Total Fund Balance $50,610,080 Total Restricted $32,038,205 Less Capital (Proposition Approved) ($8,309,825) Total Adjusted Restricted $23,728,380 Total Unassigned (Emergency Funds) 6,360,645 Total Adjusted Fund Balance $30,089, revenue appropriated fund balance and reserve = $9,974,000 Full use of these funds to support a budget without renewable revenue will exhaust all district reserve balances in 3 years.

12 Next Steps Upcoming December Board of Education Meeting: Review of Updated Long Range Financial Plan Review of Fund Balance and Reserve Plan Program Continuation Required Expense Increases for Budget