With the year coming to a close, the Wadena-Deer Creek school board reviewed the draft of their yearly financial audit for July 1, 2018 to June 30, 2019.
Luke Evenson, senior manager at Eide Bailly, shared the results of a “clean” audit and highlighted aspects of the budget that the state supplies and the school district’s evening out of fund balances for food and debt services. A “clean” audit is the highest opinion given because the finances are presented fairly and without misstatements, according to Evenson.
Both Evenson and Wadena-Deer Creek Superintendent Lee Westrum complimented school business manager Brian Jacobson on the work him and his staff did all year to track the district’s finances. Westrum was especially grateful for the remaining fund balance, which means the district has their own safety net not provided by the state.
“Having a fund balance, a cushion means everything to the school district, the stability is very, very important. So really pleased,” Westrum said.
One of the audit findings included a lack of segregation of duties, which Evenson said is common in school districts because there are not enough people hired to separate internal financial duties in an “adequate” way. He recommended the school board continue to review the receipts and disbursements and become more involved with finances. Within the remaining three categories of student activities, federal awards and Minnesota legal compliance there were no deficiency findings.
Within the comparison of the district’s budget and actual audited spending, Evenson noted two sections: state sources and regular instruction, because of their budget to actual differences of $500,000 or more. The differences are due to the Minnesota’s pension fund for teachers, which are recorded as revenue received and an expense though the district is not receiving or spending the money, Evenson explained.
Evenson ended by sharing about two fund balances, food service and debt service. The food service fund includes annual limits set by the Minnesota Department of Education to keep schools from over profiting and misspending money from the school lunch program. In 2018, WDC surpassed the limit due to equipment purchases. For 2019, the funds are below the limit.
A similar scenario occurred with the debt service funds, which include property tax levies, capitalized interest and state and federal sources. In 2018, there were bond issues because of the district’s construction. For 2019 and forward, the debt bonds will be paid annually, which will even out the funds over time.
The audit will be approved at the next school board meeting on Dec. 16.
On another financial matter, Westrum discussed a different phone proposal than the previously approved TechCheck system. The phone proposal came from Arvig, which offered better first year costs and totals over the next five to 10 years. With Arvig the cost for five years is $31,499.50 and with TechCheck it is $46,778. The higher cost with Arvig is the annual fees of $3,510 in comparison to TechCheck’s annual fees of $1,999.
Grace Schertler, business solutions consultant at Arvig, explained the hosted system, which means the phone system is hosted off-site instead of at the school. The district will no longer have to manage software upgrades and license fees separately since it is included in the hosted system monthly costs, Schertler said. The contract will be for three or five years, and Westrum recommended the five year plan. The plan also includes 1,000 free minutes of long-distance calls, saving the district $100-150 per month, Westrum said. The phones have a lifespan of 10 years. After the phone system is installed, hopefully over Christmas, teachers will receive training.
In other actions, the board approved:
A resolution to hold school district elections occurring on a different year than a statewide election at the Maslowski Wellness and Research Center. The resolution is an annual Minnesota law requirement, though, Westrum said he does not foresee a special election and if one were to happen it would come at the cost of the district renting the center.
The hiring of Anthony Kern as a Physical Education teacher.
The paying of the district’s bills totaling $496,081.01 as well as bond construction bills totaling $114,032.92.
Receiving donations to the district totaling $1,241.50.
The school board also congratulated student athletes, including cross country state participants Kira Sweeney, Lucas Hinojos and Bereket Loer and conference volleyball MVP and All State honorable mention Kennedy Gravelle. Each received praises from coaches in attendance and activities director Norm Gallant. Head cross country coach Mike Brunsberg, head volleyball coach Sue Volkmann and Gallant were also recognized for their conference and section coach achievements. Brunsberg was not able to attend.
Westrum and Wadena-Deer Creek elementary principal Louis Rutten also provided construction updates on the elementary school. Over Thanksgiving break, warranty and punch list items will be completed, including fixing dry-wall cracks and redoing four bathrooms since the floor type was rejected by the architects. Once the new floors are approved the remainder of the bathrooms will be finished over Christmas. Many rooms will also receive new carpet during this time. There are also remaining issues with the Wi-Fi, boiler, doors, locks and lockers. The project budget has a surplus of $80,000.
“That has been a pleasure to have extra funds to work with,” Westrum said. “I think very good value overall, we got a lot for our investment. Very pleased with it.”
A few other notes from Westrum included the correct coding of the elementary bus parking lot arm that will be closed from 5 a.m. to 3:20 p.m. and remain open during all other hours, weekends and for events. He also shared the enrollment report, which included a rise in students from last year and a comparable or higher amount than two years ago, despite the slight dip in numbers since September. The Nov. 2019 K-12 total is 1,023 and the Sept. 2018 total was 1,002.
Westrum closed by asking approval for sending out information to local realtors on the sale of the Deer Creek School in Deer Creek. The goal is to not have the building become an eyesore, according to Westrum. Board member Peter Hayes questioned if the building could be used for any school purposes such as a trade center. However, Westrum said adding a repair shop to the building would cost too much. The board agreed to have Westrum share the information.