Board and community confidence in the financial management of our schools is essential for our overall success. The recent news that our school district's unreserved fund balance is $1.85 million dollars is difficult for many to accept or understand. Questions regarding this surplus are fair and deserve answers.
The 2007-2008 expenditures showed signs as early as May of 2008 that they would finish under budget. The net effect of expenditure savings was approximately $550,000. The community should be proud of these savings and expect the district to work continuously at cutting waste and promoting efficiency.
The 2007-2008 revenues came in higher than expected, but this was not fully known until August. Special Education reimbursements finished nearly $600,000 higher than we anticipated. We were too conservative in this category and will carefully review this area for the current year. We asked last February for an outside review of this revenue budget, and after receiving a professional opinion which said we were indeed budgeting conservatively, we advised the board to maintain the initial estimates. Additionally, we enrolled and served more students than expected and received $400,000 of unanticipated general formula revenues. Third-party revenue (resulting from insurance company payments for Special Education-related services) rose unexpectedly and brought in an additional $300,000.
Expenditures and revenues fluctuate in any school year, and the 2007-2008 independent audit will accurately portray ISD181 budgeting conservatively against the possibility of a failed referendum and a depleted fund balance.
Comparison against recent history is also important. In the last dozen years, there have been significant differences between the approved budget and the end of the year audit. This is common for both public and private organizations. Since the creation of a Community Budget Committee last winter, we have opened the district's books and publicly reported revenues and expenditures at monthly school board meetings. Our processes and our reporting have never been more open or more transparent.
The board and our community should scrutinize the work of administration and the budgets which support our schools. Board and community should expect both expenses and revenues to land within acceptable margins. We should complete budget reviews as early as possible, and yet June or July predictions in Minnesota can be risky or unstable.
The $1.85 million dollars or 2.6 percent in unreserved fund balance is less than our district has maintained in previous years, and yet many now criticize this amount as unreasonable or improper. For many years our board recommended maintaining a 10 percent fund balance, a percentage we may never see again. Strong emotions are felt by the entire school community; this is not an easy time. Looking forward, however, is what is important. The new money buys a small amount of help and a reasonable hedge against future cuts of $1 million to $1.5 million.
What cannot be lost during the public discussion of our school budget is our story of success. With fewer resources and tougher circumstances nearly 7,000 students returned to schools and - with the wonderful support of their families and the hard work of school staff - they have successfully begun another year of learning. A focus on the students is necessary now. The dramatic events of the last week should not diminish the trust we place in our schools or our board.
STEVE RAZIDLO is the Brainerd superintendent of schools.
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