The Mexico Public School District No. 59 has a positive financial future for school districts of its size, said Lynn Graves, owner of Graves and Associates CPAs LLC. But that does not mean there are no deficiencies the district has encountered, Graves explained at the Mexico Board of Education meeting Nov. 20.
Graves presented a drafted audit report, saying there are a few more items of which his company has not factored into the final report, but that they will be by the December meeting.
“We are rendering a modified opinion, and that is what you want to hear us come back and report to you,” Graves said. “Nothing has come to our attention either situationally or departure from accounting principles that would warrant a modification.”
Graves then took the board through funding statements in the report, such as governmental funds. The district receives its revenue through Mexico, Audrain County, state and federal income, along with any investment income or other sources for a total district governmental revenue of $27,358,315.
“(This) is a five percent increase over last year’s revenue, and last year’s revenue was up five percent. So, you’re having real strong revenue growth in the district and in the corridor of districts we work with … that is the best I have seen this audit cycle,” Graves said.
The district, including bond projects, had $33,690,932 in expenditures. Graves said spending increased 2 percent compared to last year, but this was down to bond spending. The district is not operating at a loss. Graves said the district has four months worth of revenue in reserves.
“We want districts to be in the four to six months range of reserves,” Graves said. “From a practical standpoint … you may need reserves and access to funds rather rapidly. I’m well aware of constituents wondering why we’re sitting on all that cash out there, even though we still have more revenue coming in.”
The district has a strong economic base Graves said. The district collected 100 percent of the property tax it could levy in the 2017-2018 fiscal year. Normally, a collection rate of 96 to 99 percent is expected. Those ranges are indicative of a healthy community, Graves said. The district also is compliant in keeping its budget schedules up to date.
The district spent $2,446,858 in federal grants. Graves said, they don’t review every single federal grant sources, but they do key in a few on which to test the financial reporting. This is due to the federal programs being paid on a rotating basis.
“We found the district to be in compliance on those programs tested. You always seem to do a real good job up here,” Graves said.
The district does have two deficiencies in its financial responsibility. However, they are deficiencies nearly every district of Mexico’s size has, Graves said. There is not enough financial oversight staff. The district has to note this in its audit reporting, but it does not have a significant impact on its financial breakdown, Graves said. Grave said there will not be consequences. The reporting standards are one-size-fits-all. Districts throughout the country have to report the same things things to the federal government.
“So, there is no reason to believe our separation of duties will in any way compromise the financial stability of the district?” board President Dustin Pascoe asked.
Graves said they are not offering 100 percent assurance of that statement, but that it’s his company’s job to find issues that could affect the district’s financial stability.