Sibley East’s reserve fund balance up 200%
November 20th, 2009Sibley East’s reserved and unreserved fund balance for the general fund has increased 200% during the past four years.
“Sibley East is one of the few districts that don’t have aid anticipation certificates,” stated Joel Stencel, auditor with EideBailly of Mankato.
Stencel presented the annual audit report at the school board meeting Monday.
Sibley East’s general fund operating balance hit a low of $807,059 in fiscal year 2006. In fiscal year 2009, the operating balance had climbed to $2,379,928.
Although Sibley East has a significant fund balance for the general fund, the auditor recommended that Sibley East have 3/12ths of its expenses as a fund balance, which would be $2.7 million. Sibley East currently has slightly over 2/12th.
“Yes, that is good, but the district will have to keep expenses in check as it relates to the formula,” Stencel said.
Like many school districts in rural Minnesota, Sibley East is experiencing a slight decline in enrollment. Because of the declining enrollment, Sibley East will receive less state aid. In fiscal year 2008, the weighted average daily membership was 1,412.84. This dipped to 1,407.47 in 2009. The highest was in fiscal year 2004, when the weighted average daily membership was 1,492.97.
With enrollment declining, Sibley East will need to decide whether or not to go to the district voters and ask for an excess levy or to cut expenses, Stencel explained.
During the past three years, Sibley East’s revenue exceeded expenses. In fiscal year 2009, revenue totaled $11,53,928, while expenses totaled $11,076,782.
Local property taxes levied for the general fund have more than tripled since fiscal year 2005. In fiscal year 2005, $326,524 was levied for the general fund. This has increased to $1,198,086 in fiscal year 2009.
Sibley East’s revenue totaled $11,553,928 in fiscal year 2009. $9,537,198 was provided by state sources. Stencel warned that the state has an expected shortfall of $7-$8 billion. State sources provided 82.5% of the funding, followed by local property tax levies with 9.7%, other local and County sources 5.6%, federal sources 2%, and local sales and insurance recovery at .1%.
Stencel said that 77% of the district’s general fund expenditures are for salaries, wages and employee benefits. 12.99% are for purchased services, 6.57% for supplies and materials, 3.21% for capital expenditures, .30% for other expenditures, and .04% for debt service.
There is a difference of $1,748,034 from the actual receivable from the Minnesota Department of Education, and the projected receivable. The actual receivable is $1,028,25, and the projected receivable is $2,776, 289. Stencel said that the above shows the 90/10 payout from the state, with 90% of the state aid entitlement paid to the district in fiscal year 2009, and the remaining 10% is paid out in fiscal year 2010. In fiscal year 2010, the payout has been moved to 73/27. The “projected receivable” would replace the $1,028.255, and the $1,748,034 would be a direct reduction of cash received, Stencel explained.
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