Challenges caused by the state’s continuing effort to contain costs were prominently featured in the newly released annual audit of the Ashe County Board of Education.
“Despite an austere economy and a State budget deficit, the Board of Education continued its efforts to protect the classrooms to the maximum extent possible,” according to the management’s discussion portion of the audit.
The audit, presented at the February meeting of the Ashe BOE, covered the fiscal year from July 1, 2012 through June 30, 2013.
Mike Wike, auditor with Anderson Smith and Wike PLLC, which conducted the audit told the board the unmodified report indicated the “highest level of assurance” that no items were noted to be an exception to official accounting standards.
“Unmodified” has replaced the term “unqualified,” to describe an audit that was found to be free from discrepancies, according to Wike.
The total net position of the BOE is $40,838,718, which includes fixed assets, such as land and school buildings.
The general fund balance ended the year at $2,884,200, over $400,000 less than the beginning balance, which Wike said was a planned decrease to compensate for the loss of federal funds.
Stimulus funds from the American Recovery and Reinvestment Act of 2009 (ARRA) expired in 2011, and the district has been planning accordingly for the loss of ARRA and other funds at the state and federal level.
Phyllis Yates, associate superintendent of business and operations for Ashe County Schools said the $432,927 was used for “maintenance of instructional program costs and instructional salaries.”
“It is crucial to have a solid fund balance, as we’ve learned over the last couple of years,” Wike said. “School districts can’t levy taxes and have no other means to fund any cuts made at the federal and state levels.”
The BOE proprietary fund, which represents the district’s for-profit food service fund ended the year with a balance of $731,579, which Wike called a “positive result.”
“That is something to be very proud of; some districts we look at are having a really hard time being profitable,” Wike said.
The one finding which reflected an “internal control weakness” was a failure to record meal sales into the BOE’s general ledger for the month of March 2013. Wike said the managerial oversight did not cause a loss of funds and was easily remedied.
“Overall, the audit went very well, and we were very pleased with all of the cooperation and all of the hard work from the accounting staff and management in Ashe County,” Wike told the board.
Despite the reported fiscal health of the board, with governmental activities exceeding liabilities by $39,735,501, the management’s discussion portion of the audit reflected that “Ashe County Schools suffered a loss of approximately $2 million in state and federal-level cuts.”
“Due to the State’s economic trauma, teachers, school-based administrators, instructional support and support personnel has not received a salary increase for three years…the Board does acknowledge that more than three years of budget cuts and position loss have taken a deep toll on staff morale and student perceptions regarding their value to our community,” according to the management notes of the audit report.
The board noted that as such, it would continue to make plans for future conservative budget development in “a fiscally prudent manner.”
According to the management notes, local level funding provided some compensation, as Ashe County commissioners increased school funding from $3,760,520 to $4,000,000 and continued their support of the technology program by again appropriating $118,072 to it.
Other highlights from the audit
— The Ashe County Board of Education ranked 35 out of 115 school systems in the state in per pupil expenditures.
— The per pupil expenditure, including child nutrition, for 2013 was $9,450, which was relatively level as compared to 2012’s per pupil expenditure of $9,578.
— County-wide, 61.97 percent of students, including Pre-K and Even Start students, qualify for the free and reduced lunch program.
— The board paid tuition for 10 Ashe County students to enroll at Two Rivers Charter School in Watauga County. According to management notes, “charter schools continue to reduce available funding for public education.”
— The County paid $846,113 is debt service for Westwood Elementary and $760,105 in debt service for Ashe County High School.
— Primary sources of revenue are: 70 percent from the State of North Carolina, 16 percent from Ashe County and 8 percent from federal funds.
— The board’s proprietary fund had a net increase in position of $76,455 from the previous fiscal year.
Christina Day can be reached at 336-846-7164 or on Twitter @CDayinWJ