FAIRMONT - Fairmont Area School Board has approved an audit report on the 2011-2012 school year showing an unexpected increase in the general fund.
The unassigned fund balance grew by $380,519 last school year while the assigned fund balance grew by $333,884. The total was $682,546.
The board on Tuesday also approved the 2012-2013 budget, which shows the additional funds from last year are being eaten up by inflation and other costs.
Craig Poppenhagen of Clifton Larson Allen, the firm responsible for the audit, said the district has shown two years of student enrollment increases, prior to this school year, affecting the bottom line to the tune of more than $5,000 per student.
"I don't have many school district clients that have that," he said. "That drives the revenue coming into the district."
In addition to more students, the district had lower-than-expected utility costs because of a mild winter and new boiler systems, as well as lower special education costs.
Special education costs were down $226,927 from what was budgeted. According to Sue Nelson, business manager for the district, special education costs can vary wildly from year to year, as the number and severity of special education students vary.
Superintendent Joe Brown, not at Tuesday's meeting, told the Sentinel previously that the district also cut several paraprofessionals from the budget during a $1.5 million cost-saving measure last year.
Increases in the assigned fund balance stem from $100,000 set aside for the 2013-2014 computer project, $200,000 for curriculum, and nearly $70,000 for Q-Comp, an incentive program for teachers.
The general fund increases helped the district compile an unassigned fund balance of $1.8 million, or just over one month of operating expenses. Poppenhagen said a district should keep between one and two months of operating expenses aside in the fund balance.
According to Fairmont Area policy, the fund balance is used for unanticipated reductions in state aid, mandated but unfunded state or federal programs, unanticipated cost increases, and emergency repairs. Poppenhagen said the fund also is used to help the district pay bills while it waits for the state to pay funds it owes the district.
Brown said of the fund growth seen in the 2011-2012 school year that $360,000 to $400,000 has been set aside to cover inflationary costs. In addition, student enrollment is down a dozen students from last year.
The unassigned fund balance on June 30, 2011, was $1.44 million. On June 30, 2012, it was $1.79 million. The budget for next year anticipates it to be $1.44 million in June 2013.
"It sounds like we have a lot of money, but we really don't," Brown said. "Much of that money is spent down already."
Earlier this month, voters approved a referendum increasing the per-student operating levy from $500 to $950. The increased dollars will become available in the 2013-2014 budget. Without those additional dollars, the school district would have exhausted its fund balance within a few years.