The Warren County School Board has received encouraging news from the School System Audit Report for the 2020-21 fiscal year as cash reserves continue to rise after hitting a low point during the financial year 2019.
Shannon Dennison of accounting firm Anderson Smith & Wike PLLC presented the report to the board at its January 11 meeting. Warren County schools received an unmodified or clean audit.
At the end of fiscal year 2019, the balance of unrestricted school system funds, that is, cash reserves not restricted for a particular purpose, in the general fund was $483,728. At the end of fiscal 2020, the unrestricted fund balance had grown to $832,712.
Dennison told the board last week that the unrestricted fund balance increased to $1,527,758 in fiscal 2021. The total general fund balance, which includes restricted funds, was $1,533,793. $ in 2021.
School system records indicate that Warren County schools drew funds from the fund balance to balance the budget for several fiscal years between 2014 and 2019.
According to these records, the school system withdrew $178,558 from the fund balance in fiscal year 2014. Nothing was spent from the fund balance in fiscal years 2015-2017. However, $337,000 was drawn from the fund balance in 2018 and $790,569 was drawn from the fund balance in fiscal 2019.
Since then, no money has been taken from the fund balance for fiscal years 2020 or 2021. During last week’s meeting, the board passed a budget resolution for fiscal year 2022 that continues this trend without no money is withdrawn from the fund balance to balance the budget.
Warren County Schools’ total fund balance, which takes into account all funding sources, including state and federal, increased from $511,746 at the start of the 2019-20 fiscal year to $999,089 at the end of the 2019-2020 fiscal year. of the 2020 fiscal year. The 2021 audit report indicated that the total fund balance had increased to $3,026,314 at the end of the 2020-2021 fiscal year. Dennison said the COVID-19 funding is impacting the overall fund balance.
The audit report indicates that total government activities generated revenues of approximately $27.1 million in fiscal year 2021, while expenditures were approximately $23.6 million, an increase of the net position of $3,325,088. Business type activities generated revenues of approximately $2.5 million, while expenses were approximately $1.8 million, for an increase in net position of $721,229.
According to the audit report, the balance of the Child Nutrition Fund decreased from $824,039 at the start of fiscal year 2021 to $1,563,207 at the end of the fiscal year. Dennison said once again, funding for COVID-19 relief had impacted the balance.
The 2021 audit report contained two findings. In one case, the report indicated that the school district had actual expenditures exceeding the budget under capital expenditures and the school food service fund. The audit firm recommended that management closely monitor expenditures against budget and submit any necessary budget amendments to the board for approval.
In response to questions from the school board, Dennison suggested that the budget be reviewed on a monthly basis, especially in June. She noted that an increase in the amount of COVID-19 relief funding received would result in increased spending. For this reason, she recommended that the school system ensure that the budget is updated by the end of June.
Warren County Schools’ response to the finding said management will implement controls and procedures to ensure there are no over budget expenses.
The other finding involved $179,000 in funds received from the North Carolina Department of Public Instruction in excess of what was authorized. The report says the school district failed to spend the excess funds and must return them to the state.
According to the audit report, excess funds were reported in cash and a corresponding account payable to the NC Department of Public Instruction was included in the financial statements. The report also indicated that the bank reconciliation for this cash amount was not prepared in a timely manner during the year.
The auditing firm recommended that bank reconciliations be prepared monthly and any errors corrected immediately. The school system’s response indicated that management had taken steps to refund the excess amount. In addition, management will implement controls to ensure that bank reconciliations are completed in a timely manner.
Following the state budget approved by the NC General Assembly, the Warren County School Board passed a fiscal year 2022 budget resolution at last week’s meeting.
The resolution adopted allocates the following amounts to the operation of the administrative unit of the school: $17,272,056 to the State Public Schools Fund; $5,252,425 in the Local Current Expenses Fund; $10,558,905 in federal grants; $1,550,000 to the Local Capital Fund; $1,665,000 in the School Food Services Fund; and $943,817 in the reimbursable and miscellaneous fund.
The following revenues are estimated to be available for fiscal year 2021-22:
• State Public Schools Fund: $17,272,056
• Local Running Expenses Fund: $5,252,425 ($76,188 in fines and forfeitures, and $5,176,237 in county appropriations for school running expenses)
• Federal grant funds: $10,558,905
• Local Capital Expenditure Fund: $1,550,000 ($1,200,000 in state lottery fund allocations and $350,000 in county appropriations for the school’s capital expenditure budget)
• School Food Service Fund: $1,665,000 from the United States Department of Agriculture
• Reimbursable and miscellaneous fund: $943,817 ($599,130 in state reimbursable allowances and $344,687 in local revenue other than county appropriations)