ACGC audit shows decrease in district's expenses, but slow stabilization overall
COSMOS -- An audit of the Atwater-Cosmos-Grove City School District shows reductions in expenses has resulted in an increase in the net assets and reserve fund for the 2009-10 school year. But the state's delayed aid payment has weakened the district's cash fund.
In a report to the school board Monday, Steve Wischemann from Kern, DeWenter, Viere Ltd. of St. Cloud, said the state withheld about $1 million more from ACGC than the previous year.
The state held back about 27 percent of its payment to ACGC, he said. To cover that the district had to draw on cash reserves, which are now down about $500,000 from the previous year.
Wischemann said the shift in state aid was the equivalent of school districts giving the state a no-interest loan. He said he believes the state payment is "100 percent collectible, based on the information we have."
Federal stimulus money did help fill in the gap in state funding and kept the district at a "break-even" status, but the additional federal money was a one-time payment and will not continue, said Wischemann.
That could present additional budget balancing challenges in the 2012-13 school year.
"Overall the picture looks better than it did five years ago," he said. "You've come a long ways, but you've got a little ways to go."
For example, he said ACGC's fund balance is about 15 percent of its budget, when most schools its size have a fund balance at the 23 to 24 percent level.
Declining enrollment will continue to decrease the district's revenue, and with state funding becoming more "unreliable," the report said "much diligence" will be needed to keep the district solvent.
When asked if ACGC would be able to stay out of statutory operating debt, Wischemann said he was "cautiously optimistic." A district is in statutory operating debt when its budget deficit exceeds limits set by the state.
But he said in the next couple years, it will be "really tight just breaking even."