After financial declines the last few years, an auditor found Mahtomedi Public Schools had a “break-even” year last school year and is in good shape to rise out of its financial rut this school year.
A finance audit from the 2018-19 school year was presented at the November school board meeting by Jim Eichten, managing partner with MMKR CPAs.
The district had less of a decline in its fund balance this year. “The Mahtomedi fund balance has declined over the last few years,” Eichten noted, showing a graph of the district’s fund balance and percentage rate expenditures compared to others in the state. The district has a policy to have a fund balance of 8% of operating expenditures but was at 4.2%. However, Mahtomedi had a small decline this year compared to 2015 and 2018.
“The signs look good to the future,” Eichten said. The decline was just $165,000, which is like breaking even in a $40 million operation, he explained. The result was also better than projected — the district expected a $700,000 budget spend down.
“You did have a break-even year when it comes to your financial results,” Eichten concluded.
The results were because the district made significant cuts last school year. “Your overall spending per student actually went down,” Eichten explained. In the elementary and secondary regular instruction line, the district spends almost $300 less per student. Eichten also added that the district received $1,500 less per student than other comparable metro districts.
The district expects better results after this school year. Finance Director Bill Menozzi explained that the operating levy passed by voters in 2018 was not included in the 2018-2019 finances. It is in this school year’s budget and will be reflected in next year’s audit.
Despite the small decline in the fund balance, the district’s revenue, budget and expenditures lined up well last school year, Eichten said. The actual spending came within $100,000 of the budget.
“That’s incredible, actually,” Eichten said. “It’s very rare to be that close.”
Besides fund balance, the auditor looked at several other financial markers in the district. “Overall, very positive audit results,” he said.
The district received a clean opinion on its financial report. Regarding internal controls, the district was cited for limited segregation of duties within the business office. Eichten said this is not a big concern due to the district’s size.
There were no findings regarding the audit of federal awards. Regarding compliance with Minnesota state statutes, the auditor found a bid that didn’t have a performance bond. “It is a requirement in state law that the district receive both payment bonds and performance bonds for bids for contracts exceeding $175,000,” he explained.
The district’s internal service fund has a deficit. The district has already written corrective action plans for the findings in the audit.
The district applied for a certificate of excellence for its Certified Annual Financial Report but has not heard back yet; it received one for the 2017-2018 school year.
In other action, the school board:
• Approved a joint powers agreement with Washington County for election services. The agreement was updated with changes related to state regulations regarding responsibilities and fees, explained Superintendent Barb Duffrin.
• Approved the 2020-2021 school district calendar. School will start Sept. 8 for grades 1-12 and on Sept. 10 for kindergarten.