Audit shows Willmar Schools in strong position
WILLMAR — The annual audit of the Willmar Public Schools indicates a district with a healthy fund balance and a strong financial position.
Paul Harvego, a partner with Conway, Deuth & Schmiesing accounting firm in Willmar, went over the district’s financial statements in a report to the School Board this week.
“Overall, your position looks very good,” he said. “Your general fund is looking in very good condition.”
The district ended the 2012-13 budget year with an undesignated general fund balance of $7 million, about 16 percent of general fund expenditures. The board has a goal of maintaining a fund balance of at least 6 percent.
According to an analysis written by Business and Finance Director Pam Harrington, the fund balance exceeded estimates because of higher enrollment and lower-than-expected spending in some areas.
Much of the district’s state aid is tied to enrollment levels. Willmar’s average daily enrollment increased 99 students from 2011-12 to 2012-13. In the next few years, the district expects enrollment to be stable, with small increases or decreases each year, Harrington wrote.
Many districts try to maintain a fund balance of 10 to 15 percent, Harvego said. “Some are less; they would like to have your fund balance.”
School officials have discussed spending some of the undesignated funds to boost instruction in the district’s elementary schools.
Harvego said that’s not a bad idea, but he warned that the practice should be watched carefully so the balance isn’t depleted. With the possibility of federal or state budget problems always looming, he said, the general fund balance would help the district stay afloat.
General fund expenditures for the past year were $44.2 million in 2012-13 and revenues were $44.9 million. The general fund is used to pay for most of the day-to-day operations of the district.
The general fund revenue comes from four sources: local property taxes, 9 percent; state funding, 82 percent; federal funding, 6 percent; and other sources, 3 percent.
On the expenditures side, 75 percent is spent on salaries and benefits, 18 percent on purchased services, 4 percent on supplies and materials, 2 percent on capital projects and 1 percent on debt and other expenses.
The district’s other funds are Food Service, Community Education and Debt Service, and all are dedicated to specific purposes.
Harrington’s report described how the district spends its money, with three-quarters going to instruction and student support. Three percent is spent on administrative costs.
Harvego provided information about how Willmar’s spending compares with districts of similar size and with a statewide average.
District costs for administration in 2012 were $745 per pupil, while the statewide average was $823 per pupil and similar schools spent $739. The 2013 cost was $739 in Willmar, but there are no comparison numbers available for 2013 numbers.
“So we are right on par with other districts,” said board Chairman Nathan Streed.
Willmar spent $4,453 per student in 2012 in instruction. The statewide average was $4,586 and similar schools spent $4,258 during that time. The Willmar cost in 2013 was $4,729.
“Instruction is where you’d like your costs to go up,” Harvego said.
Special education costs in 2012 were $1,840 per pupil in Willmar, $1,866 statewide and $1,825 in similar schools. Willmar’s 2013 costs were $1,898. “It’s hard to come up with static numbers,” Harvego said. “You have so many variables.”
Willmar’s maintenance costs are $30 to $50 higher than statewide averages, but that’s because the district is catching up on some deferred maintenance, Harvego said.
“Overall, I’m very pleased with the district,” Harvego concluded. “Your fund balances are excellent; I commend you for your district office and the way the board operates.”
After the audit report, Harrington answered questions about the district’s general fund balance.
Having a fund balance helps with cash flow between property tax and state aid payments, she said. It also helps the district weather changes in enrollment and address emergencies.