MORRIS – Although the Morris Area and Cyrus school districts officially consolidated in July, there are a few lingering projects that need to be completed for each district.
On Monday, the joint school board completed one of those tasks – reviewing and approving the final audit reports for the former districts.
The audit for Morris Area, formerly district 769, was largely good news.
Matt Defoe with Eide Bailly said the district received a "clean" audit or “unmodified opinion,” which means the district's financial statements were prepared in accordance with generally accepted accounting practices and are free from material misstatement.
Over the course of the year, the district saw a $398,000 drop in the overall fund balance in the general fund. However, the district still has an unrestricted fund balance of about 26 percent of the annual budget.
One of the ongoing challenges for the district has been the timing of state aid payments.
After several years of delayed payments, in the 2013 fiscal year the district received 86 percent of its alloted aid in the current year. Defoe anticipated the district would receive 90 percent of its general education allotment on time in the next fiscal year.
When aid payments were delayed, it could create cash flow problems for school districts. As a result, the district’s liquidity – current ability to pay short-term financial obligations – increased from .48 to .79.
“Now we’re seeing it go in the right direction where cash is available as of June 30, 2013,” said Defoe.
The last audit for the Cyrus School District, district 611, was presented by Jim Gilman, an certified public accountant with Conway, Deuth and Schmiesing. The audit outlined the district’s financial situation effective June 30, 2013. The two districts consolidated on July 1.
During the district’s last year of operation, the district reported about $800,000 in operating expenses and $108,300 in program revenue for an overall operating debt of about $692,000.
When combined with the district’s general revenue of about $378,000 and existing assets of about $20,000, it left the district with a total debt of about $294,000.
Operating expenses were up from the previous year, which Gilman attributed, in part, to severance payouts for staff in the district at the time of the consolidation.
“In the last three or four years, the writing was on the wall,” said Gilman, noting that the district had to borrow for operations and then borrow to repay their loans.
“We knew that the district wasn’t really going to be able to survive,” he said.
Another key factor in making the district’s situation feasible for taxpayers was “getting out from under” the Cyrus school building, Gilman said.
As part of the consolidation agreement approved by both school boards, each district agreed to issue bonds to repay any of their existing debt.
The Cyrus School District sold $375,000 in bonds in June 2013 to pay down this debt. Over the next five years, taxpayers in the former Cyrus School District will help repay the bonds through taxes.
Plans beginning to divide $100,000 grant
Superintendent Scott Monson told the Morris Area School Board on Monday that a committee had been meeting to decide how to spend the $100,000 grant the school received through the Celebrate My Drive program.
Monson said 10 percent of the grant dollars ($10,000) have to be used for safe driving initiatives. About $20,000 will be put into the general fund for a variety of projects that Monson, along with principals Craig Peterson and Ken Gagner, will help select.
The remaining $70,000 will go to the Morris Area Business Professionals of America chapter “because they largely did the work behind the project.”
“Even though, realizing it involved a lot of people, we’re very fortunate to have the involvement that we did from community members and other students and other staff members, but the BPA was the driving force behind us getting in the top five in the nation for that,” said Monson.