NORFOLK - Five years ago the Norwood-Norfolk Central School District had a bleak financial picture, with a fund balance that stood at a negative $154,043.
Fast forward to Tuesday night, when auditors from Poulsen & Podvin, CPA, P.C., Watertown, told board of education members they should be happy with the results of an external audit that examined their books through June 30.
I think the district is financially healthy at this point, Certified Public Accountant Richard E. Poulsen said.
Mr. Poulsen and Amy Rapholz presented a financial picture that was a turnaround from 2007 when, over an eight-year period, the districts fund balance had dropped from $1.6 million into the red. Their school lunch program had also shown significant losses back then, auditors told board members in 2007.
This time around, the news was much better, Mr. Poulsen and Ms. Rapholz said, pointing out that the districts general governmental fund balance as of June 30 stood at $5,670,148. That figure includes $1,004,277 in capital funds, which cannot be used for general expenses.
In addition to the capital funds, the fund balance includes $201,462 for employee benefit liability, $100,731 for insurance, $201,462 for liability claims, $1,467,197 for retirement contributions, $182,821 for tax certiorari, $360,314 for unemployment insurance, $265,274 for workers comp, $9,698 for assigned encumbrances, $465,280 that has been assigned for the next fiscal year and $1,411,632 in the unassigned general fund.
Other than the capital reserves, the board could use that if they needed to. The good news is youve got some reserves you can work with, Mr. Poulsen said.
The only problem with that figure, he said, is that it was above the permitted amount of 4 percent. Business Manager Lisa M. Mitras said that it was closer to the 7 percent range.
The district should develop a plan to bring the unappropriated fund balance closer to the permitted amount, auditors said in their letter to district officials
In their management response, district officials said they had developed a five-year plan during the 2012-13 budget development process to gradually decrease the unappropriated fund balance.
The district intends to utilize the unappropriated fund balance in future budget development to balance the budget and minimize program reductions, they said, pointing out that they had increased the appropriated fund balance by $135,000 for the 2012-13 budget.
The appropriated fund balance increased from $330,279 in 11-12 to $465,279 in 12-13, they said.
Mr. Poulsen said Tuesday night that Norwood-Norfolk wasnt alone with its fund balance above 4 percent.
I wouldnt worry about that comment, he said.
Auditors also noted that, during an audit of the Extraclassroom Activity Funds, 13 out of 25 receipts they examined lacked supporting documentation and some receipts were not deposited in a timely basis.
After testing 25 disbursements, they said, four of the 25 had no evidence of receipts and several disbursements did not include the appropriate sales tax.
They suggested that a pamphlet dealing with the proper accounting for the fund be reviewed by the central treasurer and appropriate advisors.
In their management response, district officials said the central treasurer, high school principal and business manager will met with all the appropriate advisors and review the recommended pamphlet.
The business manager and central treasurer reviewed the audit test of disbursements and receipts, they said. Both parties will review the details and meet with all advisors to ensure proper procedures are in place and followed.
They also said the claims auditor will periodically review claims paid and compare student ledger activity balances with the central treasurers balances.
Any discrepancies will be noted and returned to the advisors for reconciliation, district officials said.
The only other recommendation from the auditors was that purchase orders be completed prior to ordering goods or services to provide the proper authorization for the purchases. They also said invoices should be stamped as paid to prevent a duplicate payment of an invoice.
That recommendation came after testing 25 disbursements and noting that one was dated before the purchase order and one was not stamped as paid.
District officials said the one disbursement in which the invoice was dated prior to the purchase order occurred in the Operations and Maintenance Department.
The district accepts this as a normal business practice in both the Operations & Maintenance and Transportation departments, they said.
Because of the audit report, they said a statement will be included in the administrative manual to indicate, While the proper procedure is to always obtain a purchase order and approval before items are ordered, the district realizes the need for expediency in the Operations & Maintenance and Transportation departments. Purchases can be made before the entry of the purchase orders if funds are available in said budget areas.