School district gets good news on annual audit

By Greg Oliver
Courtesy The Journal

PICKENS COUNTY — The School District of Pickens County has received an “unmodified opinion” on the 2015-16 audit presented to school board trustees at a recent meeting.

“The unmodified opinion by the auditing firm of Greene, Finney and Horton, CPAs, is the best opinion a school district can earn,” school district spokesman John Eby said.

During its presentation, the Greenville firm told the board that the general fund balance as of June 30 was $24.95 million — an increase of $2.6 million for fiscal year 2016. The unassigned fund balance was $23.2 million as of June 30, and the firm added that the fund balance represents 20.2 percent of 2017 budgeted expenditures.

Greene, Finney and Horton representatives added that a strong fund balance is very important for cash flow through the end of the calendar year until tax revenues are received, is needed due to economic times and uncertainty when it comes to state finances, allows for emergencies and unanticipated events and provides potential for better interest rates when the district issues debt.

When it comes to general fund revenues, the firm told trustees the district’s $105.6 million was $2.05 million more than the previous year.

The increase was attributed to a $1.3 million increase in state revenues due to a hike in EFA and state allocations for fringe benefits and reimbursement for property tax relief. In addition, local revenues increased $700,000 due to an increase in property tax collections that totaled $800,000. Overall, that represents 0.1 percent less than the final 2016 budget.

In the area of general fund expenditures, the firm said there was a $3 million increase from the previous year to $106.6 million, with a $2.1 million increase in instruction and $1.3 million increase in support services primarily due to an increase in employee benefits (higher South Carolina Retirement System rates and health insurance premiums), primary program salaries and purchased services for staff services and technology.

Due to lower instruction and support services throughout the various functions, there was $3.2 million, or 2.9 percent, less than the final 2016 budget.

Trustees were also told that $13.5 million was expended for special project funds, such as federal and state programs and grants (such as Title I and IDEA) and $8.6 million in Education Improvement Act funds, funded by the state’s EIA Act of 1984 that impacts approximately 25 programs.

The firm said the district is bound by federal and state requirements to use those funds only as allowed by the applicable grants and that no fund balance exists for most of those programs. Instead, any unspent funds must be returned to the state or carried over to the next year.

The audit also reported that the district has a $5.1 million fund balance to be used for planned capital projects; $300,000 restricted fund balance that is unavailable for capital outlay expenditures and that $1.1 million in outstanding contracts and commitments existed as of June 30.

Other highlights reported by the firm include a $263,000 increase of fund balance in the food service program during 2016, including $91,000 in equipment purchases. The program has a positive fund balance of $2.3 million as of June 30, representing 28 percent of 2017 budget expenditures and 30 percent of 2016 actual expenditures.

Greene, Finney and Horton reported no findings, significant deficiencies or material weaknesses in the school district’s financial audit and that only a single audit was required for 2016 — for uniform guidance. A management letter issued by the firm required communications to management and those charged with governance and involved pupil activity.

“The management letter is a general reminder of best practices of how to handle money in schools, not necessarily a problem,” said school district spokesman John Eby. “It’s a reaffirmation of best practices.”

The firm said the school district was in good financial condition as of June 30.

“This is about the cleanest audit we’ve had — it was an exceptionally good audit,” Eby said. “We’re very proud of receiving an unmodified opinion and the excellent job our financial staff does.”