Source: Sherman Publications

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District receives clean audit; deficit less than expected

by Susan Bromley

October 17, 2012

Brandon Twp.- The school district has received a "clean" audit and the operating deficit is not quite as high as the previously projected $1.1 million.

A representative from Lewis & Knopf presented audit results for the fiscal year ending June 30, 2012 at the board's Oct. 15 meeting. The audit revealed the district had general fund revenues of $28,864,180 and expenditures of $29,579,560, resulting in an operating deficit of $715,380. Officials had previously planned for a deficit of about $1.1 million. The new figures mean the district has an ending fund balance of $2,322,984, or 7.85 percent.

"I was very pleased to see the integrity of our numbers is solid and the audit report had no significant findings," said Janice Meek, executive director of business services. "(The operating deficit) is a little better than anticipated."

School Board President Kevin McClellan said while the deficit is not as much as expected, the fund balance remains lower than the 10 percent he would like.

Meek added her concern is the continuing trend of the fund balance dwindling yearly. She anticipates that without any adjustments by the district, the fund balance will be depleted in three years.

"Our goal is to have a balanced budget," she said. "We are beholden to the state."

The district receives 79 percent of general fund revenue from the state through per-pupil funding, meaning that the primary way to raise revenue would be through increasing the number of students attending Brandon. The district has lost roughly 450 students since 2006, despite an increase in the number of schools of choice students.

Expenditures are similarly a problem for the district. The audit shows that 82 percent of the district's expenses are salaries and benefits, 9 percent purchased services, 6 percent supplies, and 3 percent "other."

Board Treasurer Le Anne Schmidt pointed out during Monday's meeting that the 9 percent of purchased services are for contract employees, actually meaning that 91 percent of expenses are spent on salaries and benefits.

Negotiations are currently underway between the district and the Brandon Education Association. The current contract, under which teachers accepted a freeze on salary increases and agreed to pay more for health insurance, expired in June.

With a deficit not as high as expected, board members plan to add a social studies teacher and a language arts teacher at the high school, where class sizes exceed 40 students in some cases.