Despite a late-summer increase in budget expenses of $342,000 for staff, the Fredonia Central School District will work with a respectable fund balance going into the 2012-2013 budget process.
While the 6.7 fund balance provides some relief for unplanned expenses, it is 2.7 percent great than the general municipal law recommended 4 percent.
While presenting the findings of the external audit to the board of education during the October meeting, Laura Napoli from Baghat & Laurito Baghat explained the district could do a number of things to conform to the recommended 4 percent.
"We are over the 4 percent limit. One of the things I've discussed with the district is we have some ARRA funding in this 2010-2011 year, $704,000; we have Education Jobs Fund money of $580,000 coming in the next year. The year after that, at this point there is no money to cover that," she said, noting those federal aid programs will expire.
The funding Napoli spoke of is currently being used to pay for staff throughout the district.
To reduce the fund balance to the recommended level she suggested the board could use part of the 6.7 percent to pay for staff for the 2012-2013 school year.
"Being over the 6 percent can potentially help you use that money to retain your teachers because the Job funds and ARRA monies are going to be non-existent come the 2012-2013 school year," she said.
The district currently has unrestricted net assets of $2.6 million.
In the general fund, the district has restricted net assets of $816,671, made up of an insurance reserve of $66,000, a tax certiorari reserve of $250,000, an employee benefit reserve of $122,000 and a retirement contribution reserve of $378,000.
The numbers are a far cry from the findings in the 2010 external audit when the same auditors recommended to the district that it begin to build its fund balance. Following the November 2010 audit the district was informed that it would only have $554,000 remaining in its fund balance once it made its first payment of $698,000 back to the state for the capital project reimbursement. The 6.7 percent the district has now equates to $1.8 million in the unrestricted fund balance account.
Another recommendation given by Napoli was for the district to require more documentation with regard to student involvement. The last thing she noted was the large fund balance in the school lunch fund which can only be spent on cafeteria-type expenditures.
There are two requisitions out, according to Business Manager John Forbes, for a walk-in refrigerator and some conveyor toasters.
"We still have some improvements on the back burner," he said of the cafeteria.
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