STANTON — Fund balances across the board are looking healthy for the Montcalm Area Intermediate School District (MAISD).
During a regular meeting on Oct. 13, the MAISD Board of Education heard a presentation from Ali Barnes, a certified public accountant with Yeo & Yeo CPAs and Business Consultants.
According to Barnes, the fund balance in the general education fund is $1,315,055 as of June 30. The fund balance for the special education fund is nearly $4 million and the vocational fund is just under $1 million.
While these numbers make it seem as if the MAISD has some money to spare, Superintendent Ron Simon noted that having those fund balances can be critical to the success of the school district in cases of revenue loss.
Examples of revenue loss could be a school district within the MAISD pulling students out of programs such as early college or work study programs as the MAISD gets a certain amount of funding for each student enrolled in such programs.
“The fund balance is there but the revenue isn’t going to be there in a year or two,” he said. “So you’ll lean on your reserves there to cover the shortfall.”
Early college operates through a partnership with Montcalm Community College and the MAISD receives funding from the separate school districts to participate in the program. Even with that funding, Simon said sometimes it isn’t enough to cover all the costs of the program which is another instance of having to lean on the general education fund.
The MAISD had to “pause adding a manufacturing class at this time,” due to revenue loss according to Simon.
“We’re looking at other opportunities to offer that class, but those are the things that come up and you kind of lean on your fund balance to offset,” he said.
Barnes said as part of the audit, the firm looked over a number of things internal to the MAISD, including journal entries, receipts, disbursements, state compliance, budget, payroll, bid processes, governance including policies and procedures and board minutes as well as other things to check for material weaknesses.
“We found no material weaknesses which is a reflection of hardworking staff in the ISD,” Barnes said.
Another component of the audit is to change up what the auditors look for in the internal controls. This year, Barnes said, they compared school district expenditures for milk and paper across the board of its clients. As the MAISD doesn’t have milk expenditures, the accounting firm looked at paper expenditures.
“We evaluated what the average cost on a per unit basis is and then compared you to that,” she said. “In the paper category, you’re actually paying more than the average by about $7 per unit. At first that kind of startled us, but the more we looked at it, we realized a lot of paper had been carried over from the previous year so there weren’t very many purchases.”
The reason the firm looked at that in the school districts it serves is because there have been allegations of some administrators or managers in its client base that are receiving kickbacks for going with certain suppliers.
“Even though the average was higher here, that does not appear to be the case at all,” she said.
Barnes said overall the MAISD has done a great job at budgeting in its various funds.
“Your percentages are pretty much in line with other ISDs,” she said.
She said the various funds in the MAISD have cash assets which is in line with Simon’s thinking in terms of being to have that money to cover expenditures and revenue losses down the road.
According to Barnes, there have been very minimal changes in fund balances and budgets for the MAISD since last year’s audit report, which she said was a good thing. The MAISD has also done well overall in keeping within the budgets it sets, which is phenomenal, according to Barnes.