Wheelersburg Local School District. Fiscal Year Final Cash-Basis Financial Report. Including. June 2016 Monthly Reports

Transcription

1 Wheelersburg Local School District Fiscal Year 2016 Final Cash-Basis Financial Report Including June 2016 Monthly Reports

2 WHEELERSBURG LOCAL SCHOOL DISTRICT FINANCIAL REPORT: SUMMARY AND ANALYSIS JUNE 2016 Appendix A GENERAL FUND JUNE 2016 JUNE 2015 JUNE 2014 Beginning Balance June 1 $1,768, $1,900, $2,070, Revenues $851, $830, $737, Expenditures $1,052, $1,056, $997, Ending Balance June 30 $1,567, $1,673, $1,810, INTRODUCTION A school district s General Fund is its main operating fund containing most of its operational costs and the revenues to support those operations. This is why the emphasis of this financial report and its explanatory comments is the General Fund. A comparative summary of three years span of the General Fund for the month of June has just been presented. On the rest of this page we briefly mention June s results, particularly major financial events causing a variance from the normal cash flow cycle. On the next page the reader can compare activity for the current and two previous fiscal years for the General Fund according to revenue and spending components. We provide details regarding major revenues and spending components in the section entitled Notes Regarding Significant Revenue and Expense Categories. A careful financial study should include an understanding of the school district s cash flow cycle. The district receives only state funding during most months of the year and state aid alone does not cover monthly costs, resulting in operating deficits in most months. GENERAL FUND NOTES REGARDING SIGNIFICANT EVENTS FOR JUNE June revenues were up slightly in each category compared to last year with no significant variations or events. 2. The district s spending was nearly the same as in June 2015, but with significant variations in different categories. A neighboring district reimbursed Wheelersburg $54,240 in June 2015 for spending on its behalf throughout FY This deflated total June 2015 costs. Adjusted, June 2106 costs were actually less, then, comparatively. All other variations were simply timing issues from other months spending. 3. Outlook for July 2016: July will be a deficit spending month as usual until the very end of the month when a real estate tax advance usually arrives. This will then make the month of July look very healthy. TOTAL OF ALL FUNDS (EXCLUDING CONSTRUCTION & BOND RETIREMENT FUNDS) JUNE 2016 JUNE 2015 Beginning Balance June 1 $3,149, $3,281, Revenues $1,101, $1,065, Expenditures $1,239, $1,376, Ending Balance June 30 $3,011, $2,969, TOTAL OF ALL FUNDS CASH-FLOW NOTES FOR JUNE 2016 Besides the General Fund, the Total of All Funds primarily consists of district scholarship funds, the Permanent Improvement Fund, the Facility Maintenance Fund, the Severance Reserve Fund, various state and federal grants, various student activity funds and the food service fund. The decrease in the Total of All Funds resulted primarily from the General Fund decrease (see discussion above). The Permanent Improvement Fund also saw a significant decrease due to Chromebook and charging cart purchases. Scholarship funds also saw decreases as payments were made in advance of upcoming Fall Semester university enrollments. Funds that increased significantly include state and federal grant funds and the Facility Maintenance fund. Other funds saw ordinary slight increases or decreases.

3 WHEELERSBURG LOCAL SCHOOL DISTRICT FISCAL YEAR 2016 FINAL FINANCIAL REPORT CURRENT FISCAL YEAR BEGINNING JULY 1, 2015 COMPARED TO PAST TWO YEARS (2) FY 2016 compared to FY 2015 Budgeted (2) Impact Impact Forecast YTD Actual YTD Positive / Actual YTD Positive / Actual YTD Line FY 2016 (1) FY 2016 (Negative) FY 2015 (Negative) FY Beginning Cash Balance $1,673,937 $1,673,934 $0 $1,810,449 ($136,515) $1,676,219 Revenues 1.01 Real Estate Taxes $2,904,660 $2,870,398 ($34,262) $2,892,122 ($21,724) $2,883, Unrestricted State Foundation $6,923,851 $6,987,675 $63,824 $6,668,469 $319,206 $6,779, Restricted State Aid $177,374 $154,171 ($23,203) $174,477 ($20,306) $206, Property Tax Allocation $377,250 $378,505 $1,255 $377,250 $1,255 $374, All Other Operating Revenue $2,455,777 $2,545,507 $89,730 $2,456,914 $88,593 $2,173, All Other Financial Sources $159,175 $84,318 ($74,857) $158,819 ($74,501) $176, Total Revenues $12,998,087 $13,020,574 $22,487 $12,728,051 $292,523 $12,593,507 Expenditures 3.01 Personal Services $7,111,502 $7,089,172 $22,330 $6,849,603 ($239,569) $6,565, Employees' Retirement/Insurance $2,665,311 $2,678,623 ($13,312) $2,604,162 ($74,461) $2,621, Purchased Services $2,576,076 $2,549,901 $26,175 $2,524,380 ($25,521) $2,451, Supplies & Materials $452,033 $487,308 ($35,275) $525,527 $38,219 $512, Debt Service: Principal & Interest $70,711 $69,930 $781 $70,485 $555 $70, Other Expenditures $171,541 $168,562 $2,979 $172,709 $4,147 $168, Transfers Out $70,300 $83,300 ($13,000) $117,700 $34,400 $66, Advances Out $5,000 $0 $5,000 $0 $0 $ All Other Financing Uses $100 $0 $100 $0 $0 $1, Total Expenditures $13,122,574 $13,126,796 ($4,222) $12,864,566 ($262,230) $12,459, Ending Cash Balance $1,549,450 $1,567,712 $18,262 $1,673,934 ($106,222) $1,810, (3) Revenue in Excess of Costs (Loss) ($124,487) ($106,222) $18,265 ($136,515) $30,293 $134,230 Notes and Methodology: (1) The "Budgeted YTD FY 2016" column is based on the district's Five-Year Financial Forecast, submitted to the Ohio Department of Education in October The Forecast can be accessed at The district updated the Forecast in May The updated version is the version that is available online. (2) The "Impact Positive / (Negative)" column is either positive or negative depending upon the effect on the district's cash balance. If an expenditure category decreases, then this has a positive effect and it is shown as a positive number. (3) "Revenue in Excess of Costs (Loss)". This overall sum reflects the district's ultimate financial measure of its ability to pay future costs. On the previous page there is discussion of how most months are deficit months. The tax revenues of July, August, February and March carry our school district through leaner months.

4 NOTES REGARDING SIGNIFICANT REVENUE AND EXPENSE CATEGORIES Revenues--the district forecasted a 2.1% increase in revenues for FY What it actually saw was a 2.3% increase, or $292,523 more. The Forecast was within $22,487 of actual performance. Very close! Forecast Line # Forecast Item Description 1.01 The district receives its Real Estate Tax revenue in two settlement periods per year, August and March. The district expected revenue growth which did not occur. Disappointingly, total collections were less than in the prior two years. (1) Scioto County government has responded to local school district requests to follow-up with local tax payers whose property taxes had become delinquent. The amount of delinquent collections rose rapidly, doubling in two years as a result of this effort. However, the delinquent amounts being collected have leveled off. (2) In contrast, the amount of current taxes being collected has not risen since FY 2014 (from FY 2013). The amount received in FY 2016 was flat compared to FY No boost from a triennial update or appraisal was expected this year, so only a scant increase was expected. (3) The conclusion here is that the effort aimed to reduce delinquent taxes has not discouraged other tax payers from becoming delinquent on their current taxes Unrestricted State Foundation and Restricted State Aid 1.04 The district had received less state funding in FY 2015 than it did in FY 2014 as a result in the decrease in resident enrollment of 20 students. The district enjoyed a rebound in enrollment in FY 2016, with an ADM of 1,355.65, regaining about half of the prior year's loss (from 1,366 to 1,346). The state implemented new funding components for the FY 2016 school year. The district benefited from the new formulas. Even after accounting for the increase of nearly 10 students in our enrollment, the formula yielded additional funding for the district over the previous year with a total increase of about $290,000. The district's forecast of state revenue was very close to target The Property Tax Allocation category shows state payments to the district for real estate tax discounts, called "rollback" and "homestead exemption", given to taxpayers for their primary residences and to low-income seniors. This revenue is relatively stable, without significant fluctuation All Other Operating Revenue consists of Open Enrollment revenue (86.9%), state Catastrophic Aid (2.5%), open enrollment special education weighted funding (4.8%), investment earnings (1.2%) and Medicaid in Schools program funds (4.6%). Open Enrollment revenue this year increased by $818,422. (The rate of growth of Open Enrollment was significantly less in FY 2016 compared to FY 2015). Catastrophic Aid settled back to its usual annual level after yielding two payments in the same fiscal year in Medicaid in Schools Plan ("MSP") gave the district this year's unexpected boost. The Department of Medicaid had been behind in its reimbursement payments and got back on schedule in this fiscal year, giving the district two payments this year. (In other words, this source will yield less revenue in FY 2017.) 2.06 All Other Financing Sources derives from three primary sources: payments from other districts for personal aide services our district provides for their students; Bureau of Workers' Compensation rating refunds; and federal e-rate reimbursements. These are generally predictable, but a large one-time BWC rebates in FY 2015 and FY 2014 accounts for a large reduction in FY Also, the district did not receive an e-rate reimbursement from SCOCA as it should, adding to the reduction. Real Estate Taxes State Aid Property Tax Allocation Open Enrollment, etc. All Other Sources

5 NOTES REGARDING SIGNIFICANT REVENUE AND EXPENSE CATEGORIES (continued) Expenditures--In FY 2016 the district spent $262,230 more than last year, an increase of 2.0%. This is just slightly more than $4,000 than forecasted, very close! Forecast Line # Forecast Item Description Personal Services and Employees' Retirement / Insurance 3.01 This is the district's main area of cost. Schools are by nature have people as their main assets and costs The district spent 3.3% more than last year for employee wages and benefits which is the amount that was forecasted. (1) Employees received a 3% raise on their base pay during this school year, in addition to experience step increases. (This causes other costs, which are based on total payroll, to rise in response.) (2) The district reinstated the assistant middle school principal position for the school year. (3) The district created a new technology position ("Network Administrator"). Increased salary cost will lead to decreased cost in the "Purchased Services" category. (4) The district created an additional one-half teaching position and one special education aide position. (5) The district made a $20,000 payment to School Employees Retirement System in September 2015 due to under-estimated payments made during Fiscal Year 15. (6) Offsetting these increases are reductions due to new employees replacing retired personnel. The replacements will cost less as retiring teachers were at the top of their salary scale The chief costs for Purchased Services include: 1. Tuition for district students who attend elsewhere via Open Enrollment and community schools. 2. Special Education cooperative units and student support services (school psychologist, speech services, etc.) 3. Utilities for the district's preschool through 12th grade building, as well as the maintenance building, bus garage, administrative building, the stadium and a few other smaller usage points. These three items combine for 82.2% of the district's expense in the Purchased Services category. Costs increased in Purchased Services by scant 1% in FY The following changes are worthy of note: 1. The number of resident students who attended a neighboring school district decreased, which was a welcome change! This saved the district nearly $85,000 in FY 2016 compared to FY Open enrollment (out) was down by 17 students. 2. Special education tuition paid to our partners operating our cooperative units spiked upwards dramatically. Costs were $180,332 more, an increase of 28% 3. The district formerly contracted with its internet provider for a full-time technical coordinator. This district created this position ("Network Administrator") this year, saving $65,000 in FY 2016 in this category. Of course, the cost was shifted to the Personal Services and Employee's Retirement / Insurance categories as discussed above. 5. The cost of special education cooperative and shared services rose by about $14, The cost of Supplies in FY 2016 was more than budgeted but was less than FY 2015's cost by about the same amount. 54% was spent for instructional supplies and 40% is spent for building maintenance and student transportation Principal and Interest charges relate to construction of the current K-12 school building. Due to cost over-runs, the district 4.06 borrowed $575,000 to provide its local share of the additional budgeted construction cost. This will be paid off in FY "Other Objects" is a miscellaneous expense category, mainly consisting of fees charged the district by the Scioto County Auditor and Treasurer; the County Board of Education; the district's Information Technology Center ("SCOCA"); and the district's auditors The district annually transfers dollars to fund future employee severance payments Excess of Revenues over (under) Expenditures For only the fourth time since 2002 and only the sixth time in twenty years, the district operated at a deficit. This is the first time in twenty years the district had suffered deficits in back to back years. The district had forecast a June 30, 2016 deficit of about $124,487 back in October 2015; the deficit came in at $106,222.

6 EXPENDITURE CHARTS There are two different ways to organize a review of our costs. One is to answer the question, Where did we spend our money? The second is to answer the question, What did we buy? (The second approach is the basis for the preceding narrative.) The next two charts show both approaches. EXPENDITURE CHART #1 Costs organized to answer the question, Where did we spend our money? Debt Service and Transfers Extra-curricular Building Operations & Transportation Administration Guidance, Nurse, Library & IT Instruction $0 $2,000,000 $4,000,000 $6,000,000 $8,000,000 EXPENDITURE CHART #2 Costs organized to answer the question, What did we buy?

7 June 30, 2016 WHEELERSBURG LOCAL SCHOOL DISTRICT Cash Reconciliation Report Total Fund Balance $3,980, Gross Depository (Bank) Balances: Wesbanco (Checking) $1,308, Investments Certificates of Deposit $2,420, Other Securities (cost as of June 30, 2016) $280, Other Investments (money market funds, etc.) $18, Sub-Total: Investments $2,718, Cash in Transit to Depository (recorded but undeposited monies) $.00 Petty Cash Balances: Wheelersburg Elementary $.00 Wheelersburg High School $.00 Administrative Office $ Sub-Total: Petty Cash Balance $ Change Funds $ Total $4,026, Less Outstanding Checks -$45, Total (Reconciled Balance) $3,980, Adjustments: (1) Bank error reconciling check # $ Adjusted Total $3,980, Submitted by George Grice, Treasurer, Wheelersburg Local School District

8 INVESTMENT SUMMARY AS OF JUNE 30, 2016 Federal Agency Securities (General Fund) 10.2% of Portfolio Next Par Moody s Purchase Market Yield Date of Date of Next Paid Coupon ID/Cusip# Description Value Rating Date Value to Maturity Maturity Next Call Coupon Payment 3130A8JJ3 FHLB $280,000 AAA 06/30/16 $280, % (step) 06/30/21 12/30/16q 12/30/16 $1,260 (Call notations: q = quarterly; a = annual call) Negotiable Certificates of Deposit 89.1% of Portfolio PV1 Sallie Mae Bank (g) FDIC 10/17/12 $200, % 10/17/16 N/A 10/17/16 $1, DLQ9 American Express Centrn (g) FDIC 10/18/12 $200, % 10/18/16 N/A 10/18/16 $1, J5W0 BMO Harris Bank NA (g) FDIC 10/21/15 $200, % 10/23/17 N/A 10/21/16 $1, LVB6 Ally Bank FDIC 10/22/15 $221, % 04/23/18 N/A 10/23/16 $1, AG41 Sallie Mae Bank (G) FDIC 09/17/14 $252, % 09/18/18 N/A 09/17/16 $2, KJN8 Barclay s (G) FDIC 09/23/15 $243, % 09/23/18 N/A 09/23/16 $1, JU41 Goldman Sachs Bank FDIC 10/21/15 $243, % 10/22/18 N/A 10/21/16 $1, SN1 Capital One Bank (sc) FDIC 06/24/15 $192, % 06/24/19 N/A 12/24/16 $1, QS0 Discover Bank (G/sc) FDIC 06/24/15 $192, % 06/24/19 N/A 12/24/16 $1, REB0 Capital One NA FDIC 10/14/15 $248, % 10/21/20 N/A 10/14/16 $2, H5 Wells Fargo Bank NA FDIC 06/30/16 $250, % 06/30/21 N/A 12/30/16 $2,000 $2,447, (g=general; sc=scholarship) NOTE: Negotiable Certificates of Deposit are insured by the FDIC up to $250,000. Money Market Accounts immediate liquidity 0.7% of Portfolio Huntington Investment Company money market account---gen. Fund $ % Fifth/Third Securities money market account General Fund $17, % $18, TOTAL PORTFOLIO $2,745, Prior period market value was $2,733, Invested funds remained significantly the same with only market value fluctuations and addition of earnings.