Consultant: Fiscal year could end in the black
Posted on Wednesday, July 23, 2008
DECATUR — New figures show a possibility that the Decatur School District could end the 2008 fiscal year in the black.
Newly hired financial consultant Leroy Ortman presented the 2008 financial statement at Monday night’s school board meeting.
“ This is the first financial statement you’ve received in quite some time that’s truly reconciled with the bank accounts, ” Ortman said.
The statement shows Decatur’s operating fund ending the year with a negative balance of $ 1, 374. 56 — far less that the more than $ 600, 000 negative balance estimated by the Arkansas Department of Education in June. If additional adjustments were made, the school could end the year more than $ 30, 000 in the black.
The school has 30 days after the fiscal year to make adjustments to the financial statements.
Ortman said he reached the figure after noticing that many of the categorized accounts have high balances. The school’s operating fund is the only undesignated, unrestricted fund over which the school board has total control. All other funds may be used only for their specific purposes, he said.
“ Some categorical funds were not utilized properly, ” Ortman said.
He discovered that bills were coded so that money came out of the operating fund instead of the categorical funds from which the money should have been taken.
School officials have received permission from the Arkansas Legislative Audit Committee to transfer the money out of the specific funds into the operating fund, bringing up the ending balance.
“ I want to caution you, ” Ortman told the board, ” you do have obligations in the month of July that have to be taken care of before July 31. ”
There are $ 53, 400 worth of salaries and $ 162, 000 worth of bills and bond payments yet to be made in July.
Ortman suggested that the board authorize board president Michael Wilkins and interim superintendent Bobby King to obtain a loan to cover the expenses. Ortman was optimistic that the ADE would give approval for the loan.
“ Somebody has to pay those bills, ” he said.
King said he has been working with Hazel Burnett of the ADE on next year’s projected budget. The projected deficit was stated, in June, to be more than $ 600, 000, and at one time rose to nearly $ 850, 000. The most recent calculations show the school will be around $ 419, 000 in the red at the end of next year, King said.
“ I think we can get that number down lower, ” he said.
In addition, the community has raised around $ 136, 000, and another $ 100, 000 has been pledged to help keep the schools open.
Ortman cautioned the board about including the donated money in projections at the state meeting on July 31.
“ That’s one-time money, ” he said.
School board members voted to appoint King the ex-officio officer for the 2008-2009 school year, making it legal for him to pay the school’s bills.
The board also voted to direct King to pursue getting a loan to pay the July bills, with the approval of the state.
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