POTSDAM - The Potsdam Central School Districts 2012-2013 external audit reports the district is in good financial shape despite years of declining revenues.
In the current year, the unassumed fund balance is 5 percent, said Ray J. Chip Clark, of DArcangelo & Co., the districts auditing firm.
While an unreserved fund balance of 5 percent is above the states 4 percent limit, Mr. Clark said hes not concerned about it.
I dont feel your fund balance is excessive, he said of the $1,366,239 account. Your variances are very much within reason.
Mr. Clark noted that when budgeted revenues of $27,725,218 were compared to the actual revenues of $25,521,726, the district had a variance of 3.5 percent.
On the expenditure side, Mr. Clark said that variance was 3.9 percent. According to Mr. Clarks presentation, the district had budgeted expenses of $27,725,218 versus actual expenses of $26,506,702.
Youre going to start seeing those variances go down, Mr. Clark said, explaining that as districts continue crafting budgets in these tough financial times, the amount of cushion they are able to budget is likely to go down.
He did say, however, that with variances in the 3 to 4 percent range the district was where he would like them to be.
Most districts he reviews have variances within the 1 to 5 percent range, he said.
One is too tight and 5 is a little loose, he said. Its so a variance is in the 3 percent range.
The one area of concern Mr. Clark said he had was with the Extraclassroom Activities Fund, something that isnt the result of any wrongdoing by the district, but rather how the accounts must be handled and an issue with most school districts.
We qualify our opinion with all of our districts, he said.
Referring to the districts fund balance and reserve funds, Mr. Clark said the district is financially healthy, at this point.
Financially you are strong, he said, noting the districts unallocated fund balance of $1,366,239 is actually the highest it has been in over the past five years.
Mr. Clark also noted the district has reserve funds of $112,541 for encumbrances, $605,842 for employee benefit accrued liability, $415,615 for tax certiorari claims, $579,808 for retirement contributions and a $213,889 account for unemployment insurance.
Despite the positive report, Mr. Brady said the district could be looking at some tough decisions this year.
While the tax cap is widely reported as being 2 percent, Mr. Brady noted the way the law is written the base for the cap is actually 2 percent or the consumer price index, whichever is lower.
We could be looking at a tax cap or 1.5 percent, he said, noting the CPI has been hovering around 1.5 percent for most of the year.
If we dont see an increase in state aid, we could be looking at some difficult decisions come budget time, he said.