High marks in audit for Niles, but funding cuts loom

Published 9:07 am Monday, November 29, 2004

By By SPIROS GALLOS / Niles Daily Star
NILES - Despite good news coming from the results of the Niles Community Schools 2003-2004 fiscal year audit, the district is bracing for funding cuts from state legislators.
The future of school funding will be determined in December when legislators in Lansing meet for a special Revenue Consensus Committee meeting to determine if the School Aid Fund will need to be cut this year.
Although the schools were promised they would not be cut, they have now been advised that this year's funding could be cut by as much as $75 per student.
The district currently receives $6,700 in state aid for every student enrolled. If the funding is cut by $75 per student, the district stands to lose about $300,000 in funding for the 2004-2005 fiscal year.
Law said the board does not anticipate making any cuts to the budget this year as a result of the expected state aid cuts.
To cover the money lost from state aid cuts, Law said the Board would tap into the district's fund equity to complete the 2004-2005 school year as planned.
Law said the Board would then have to change their plans for the district in the face of December's expected funding cuts.
If there is a cut, it will be the third year in a row that schools have received a funding cut in the middle of the year.
Niles Community School Superintendent Doug Law said school administrators across the state were warned there was a possibility cuts would come after the November election.
The district did add to its fund equity according to the annual audit, which was conducted by Scarpone &Company, P.C.
James Scarpone, CPA, gave the district high marks for the handling of its finances.
Despite reductions in state aid and increasing costs for retirement, insurance, and special education, the district was able to add $350,000 to its fund equity.
The fund balance now stands at $3.3 million with an operating budget of over $33 million.
But the high praise came with a warning. Scarpone advised the Board that the fund equity would only run the district for one month.
He urged the district to continue its conservative financial planning process. "The future is not bright for school financing and the district must be very careful in its spending practices," Scarpone said.
Law pointed to several Board decisions that were made in the past few years. Specifically he pointed to the early retirement program for teachers, the energy savings plan, the privatization of the food service operation, and the passing of the building and site improvement fund. In addition, the district has looked for cuts and savings in every department.