MARSHALL - Hoffman and Brobst audit manager Lisa Zmeskal provided Marshall Public School Board members with a thorough audit presentation at the regular work session meeting Monday at Marshall Middle School.
Board members listened to the information supplied and asked questions but will not take action on it until later this month.
"It was a profitable year, with revenues exceeding expenditures by $260,000," Zmeskal said. "But because of the severance pay and a significant delay in funds from the state, it's not as good as the $750,000 you had last year."
Approximately $300,000 was paid in teacher retirement incentives as part of the buyout process, Zmeskal said. That, along with the fact that the state shifted more than $1 million from state aid to local taxes last year, resulted in cash flow issues, the lowest point the district's available cash balance in the General Fund has been in the last 10 years, she said.
In light of limited cash flow, MPS used aid anticipation certificates.
"You received about $7.2 million from the state, which is about one-third of your state revenue," she said. "The rest will be received in the next fiscal year."
Business Director Bruce Lamprecht explained to the board that there were actually two state shifts that occurred as Minnesota tried to balance its budget. The vast majority of the district's funding typically comes from the state.
Superintendent Klint Willert also wanted to make sure everyone put the fund balance, which is currently at 15.8 percent, and cash flow issue in the proper context with all the other factors regarding the budget.
"While the fund balance has grown, it's grown out of necessity," he said. "I think it's important to take a look at that because we have a target of a minimum of 8 percent in the district and that's a reflection of our expenditures, so that number does tend to grow just by default. But when you look at what's happening with the adjusted cash balance, I think it's important nuance or difference to recognize as you look at what's happening. To a great extent, that's impacted by what's happened with the lack of payments by the state."
During the presentation, Zmeskal also highlighted other areas, stating that the increase in transportation and electricity costs caused purchased services to increase.
"That was because of diesel costs and special education routes," she said.
The portion of expenditures spent on salaries (77 percent) was also said to be trending as expected.
"It should be the largest portion," Zmeskal said. "It would be very unusual to not see these kind of percentages."
There was good news, Zmeskal said, in the form of increased student enrollment in the district.
"This last year, enrollment increased about 60 students," she said. "And it looks to go up again this year, so that should have a positive impact on the district."
Lamprecht also mentioned that while the integration aid in the approximate amount of $300,000 is expected to be discontinued, it may show up in a different form, possibly as innovation grant funding.
Willert also updated the board on the Race to the Top application, which was completed and sent in. The district now awaits word on whether or not they, along with the five other school districts involved in the collaboration, will receive the multi-million dollar grant award.
"It's certainly an exciting time," Willert said. "About the first or second week in December, they should give the award notifications."
The first part of the plan would involve enhancing the technology infrastructure in each of the six school districts, followed by 1-to-1 initiative efforts toward managing individualized learning plans for students, as well as staff development.
As a reminder to anyone in the public who wants to attend, the Truth in Taxation meeting is scheduled to begin at 6 p.m. on Monday, Dec. 3, replacing the original work session meeting scheduled at 4 p.m.