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December 12, 2018

12/6/2018 8:18:00 AM
Randolph School District gets positive audit report
by Ken Haggerty

At its November 20 meeting, the Randolph School Board received a positive report on the audit of its fiscal year that ended June 30, 2018.

Burkhardt & Burkhardt, Ltd., out of Mankato and Annandale, submitted the report.

The auditors noted that Randolph's unrestricted operating fund balance as a percentage of operating expenses was at 37.57%. This is well above the Minnesota average of about 21%. The auditors say this one of the most common statistics used to evaluate school district financial health.

The audit report noted the school board policy establishes a minimum unassigned general fund balance of 17-20% of the annual budget.

At the meeting, the auditor noted a good fund balance should help with the district's bond rating. The district will be in the market early in 2019 for a $6.8 million bond for its recently voter-approved expansion project.

The auditor noted the district could use some of the reserve to make cash purchases moving forward, avoiding interest payments or lease payments.

The auditor complimented the district for "doing more with less," when breaking down revenues and expenditures per student.

The audit notes the Randolph district total governmental fund revenue per student was $13,332 in the 2017-18 fiscal year. That is less than the state-wide average for 2016-17, which was $14,565. The state-wide average for 2017-18 is not yet available.

For the general fund, Randolph got $1,067 per student in property taxes in 2017-18. The state-wide average for 2016-17 was $1,815.

Also in the general fund, Randolph got $248 in federal money per student in 2017-18. The state-wide average for 2016-17 was $463.

Randolph received $8,311 per student in general fund state money in 2017-18. The state-wide average for 2016-17 was $9,577.

The final general fund revenue category is "other sources." Randolph was at $1,378 per student compared to the state-wide average of $512. This revenue amount was mostly from the sale of two student-built houses in the fiscal year.

Outside of the general fund, in 2017-18 Randolph had food service revenue of $614 per student, community education revenue of $682 per student, and debt service fund revenue of $1.032 per student. State-wide averages were $554, $595, and $1,050, respectively, for 2016-17.

Randolph total expenditures per student served were at $13,239 for 2017-18, up from $12,537 and $10,360 in the previous two fiscal years. The state-averages in the previous two fiscal years were $13,367 and $13,497.

The breakdown of expenditures for Randolph in 2017-18 per student served showed administration at $1,186, elementary and secondary instruction at $5,739, vocational education and instruction at $267, special education instruction at $1,447, instructional support services at $458, pupil support services at $544, site and buildings at $1,254. That adds up to total general funds expenitures per student of $10,895. Food service adds $584, community education adds $695, and debt service adds $1,064.

For accounting purposes, the state and the district calculate per student costs on "average daily membership" or ADM. ADM is a measure of students attending class, which is then converted into pupil units using a statutory formula. ADM for the district in 2017-18 was 662. Prior years were 657, 654, 622, 590, and 576. In fiscal 2018, the district served about 77.4% of its resident students. It served 327 non-resident ADM attending the district through open enrollment.

Total general fund expenditures were $7,212,784. Regular instruction accounts for 52.7% of that spending. Special education is 13.3%, site and buildings and equipment is 11.5%, administration and support is 10.9%, pupil support services were at 5%, instructional suppoort was at 4.2%, and vocational instruction was 2.4%.

Additions to capital assets were put at $271,034. These included a new roof over the north gym, a new rooftop compressor, various athletic complex remodeling, carpeting, and a new pick-up truck.

As they do every year, the auditors noted that Randolph, like other small districts, has just a few people handling the bulk of the financial duties of the district. They said this creates a risk and requires the board and other staff to take extra due diligence in watching receivables and payments.

The auditors noted an "honest mistake" in a violation of bid laws for the roof top compressor unit project. State law had required a closed bid process for any project over $100,000. The project, which was not formally bid, started out under $100,000 but ended up going over that amount. New law sets the amount at $175,000.

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