By By JOHN EBY / Dowagiac Daily News
The majority of Dowagiac Union Schools District's $765,000 deficit last school year was capital projects the school board chose to undertake, such as the $130,000 WAN (Wide Area Network), according to Superintendent Larry Crandall.
Mike Wilson of Norman and Paulsen's Sturgis office, highlighted the district's audit for the fiscal year ended June 30.
The general fund, the district's primary operating fund, showed a $6.4 million fund balance, of which $2.9 million was in cash and $3.2 million was in receivables primarily due from Michigan for state aid in July or August.
Liability for $2.4 million is primarily the unpaid portion of the teacher contract paid out in the summer, including Social Security tax, retirement and health insurance.
Total fund balance then would be $3.9 million, of which $2 million was reserved for working capital and $700,000 was designated for future projects. That left the general fund with an undesignated, unreserved fund balance of about $840,000 June 30, Wilson reported Oct. 17 in the Dowagiac Middle School cafeteria.
General fund expenditures for the 2004-05 fiscal year ended June 30 were $21,163,000, of which approximately $13 million went for instructional costs and a little over $8 million was for “supporting services.”
Wilson also reviewed major funds, such as 2002 capital projects, which resulted from the bond issue to build the new middle school. As of Sept. 30, 2005, that fund had a balance remaining of $2.7 million. “The goal is to spend that balance down to zero on the project, and I anticipate that by June 30, 2006, that would be very close, and that fund will disappear.”
Wilson said the fund generated the district $103,000 in investment income and spent out $7.4 million during the year. It began the year with a $10 million fund balance.
The other major fund that “popped up” was the debt service fund. “The purpose of that fund is to account for collection of those property taxes. That fund at June 30 had a balance of about $800,000. It needs a fund balance, obviously, because you have an interest payment due Nov. 1, which will use up a significant amount of that,” Wilson said.
Wilson said the district's net book value of $3.9 million had a “very slight change, a decrease of $16,000. Part of those expenditures out of your fund balance were for capital assets, such as land. Land will not depreciate. Land will sit on your balance sheet … as an asset, a net value. Let's face it. You're not in the business of creating net book value or creating financial statement wealth to the shareholders of the district. You're in business to educate children, obviously. It's important to look at if it's eroding. That's an indication to me that their assets have become depreciated and they're not replacing them.”
Wilson thanked Assistant Superintendent for Business and Operations Hal Davis and his staff and said Dowagiac's audit “is probably one of our easiest.”