An audit of the Jefferson City Public Schools revealed the district is in good fiscal condition, accountant Jim McGinnis reported last week.
"The scope of the audit was unimpaired," McGinnis reported to the Board of Education. "We received full cooperation from the district's staff. All of the documentation that was provided to us was in excellent shape and we followed all of the governmental auditing standards that we are required to follow."
McGinnis - partner with the Jefferson City-based firm Gerding, Korte and Chitwood - credited the district for successfully refinancing more than $9 million in general obligation debt, resulting in a savings of almost $656,000 in future interest costs.
"That's a good thing for all the taxpayers of the district," he said.
The auditor reported for the fiscal year ending in June 2014, South Elementary School was renovated and work on West Elementary School was started. More than $3.6 million was spent to make improvements to facilities.
The district's operating fund balances "remain in a very strong financial position," he said.
"Actually, (it was) one of the closest jobs of budgeting I have every seen, with respect to the original budget of your operating funds. We were within $200,000 of the original budget ... a .0001 percent variance. That's pretty good," he said. "Nevertheless, we did finish the year with a slight deficit for the general fund and teachers fund."
After a planned spend-down of reserves of $697,373, the ending fund balance was 25 percent - which is above the board's goal of 20 percent, but a slight decrease from the previous year.
"Jefferson City Public Schools is a very unique district," McGinnis told the board. "Within the state of Missouri, most school districts receive an equal amount of funding from local sources, compared to state sources."
But, in Jefferson City, the local funding sources are the primary provider of income. Of the $90.2 million that flows into district coffers, $56.5 million is from local sources. Only $20.7 million comes from the state, the audit noted.
"That makes cash flow operations at this district critical," he said. "Because at June 30, we have to make it all the way to that January tax payment, and have enough money in the bank to cover all of our obligations" through the course of the year.
McGinnis also said JCPS is notable among its peers for the extraordinarily large amount of money it could borrow, if voters ever approve a bond issue. The Missouri Constitution limits a school district's debt to 15 percent of the taxable tangible property in that district.
"I don't work with any other school districts with this much room under their bond ceiling," he said, noting the district is currently has obligated itself to $53 million in bonds payable. "That leaves you $147 million of bonding capacity. That is extraordinary for any district to have that level of capacity."
On another topic, McGinnis said, because JCPS accepts federal and state funds, those governmental entities are empowered to dictate some of the annual audit's requirements.
"With respect to the federal programs, I'm very pleased to report "no findings' and "no questioned costs,'" he said.
State law also requires auditors to examine attendance and transportation data-gathering techniques and overall budget compliance.
"I'm very pleased to report no problems in any of those areas, either," he said, adding the compilation of the district's attendance data has been particularly excellent.
"The last few years we've had absolutely no problems in reconciling ... your attendance data," he said. "Those of you who have been on the board a while know that's not necessarily always been the case."
Because of the massive amount of data kept, it's "unheard of" not to have changes, he said.
"For two years in a row it's been perfect," he said. "The reason that this is so important is that all of your state funding is driven off of attendance data. So, the more accurate that data is, the better off we are as a district."
McGinnis did offer some suggestions for improving the district's performance.
He noted the use of purchase orders - which are required as a matter of policy - are not always used appropriately.
"Purchase orders serve as an approval for a transaction. What we find in many cases is a transaction has already occurred before the purchase order is actually issued. Meaning the purchase order is forgiveness," he said.
He also noted, while the Facilities Department is doing a "fabulous job" of ensuring that competitive bids are being solicited, other district departments aren't "quite so compliant."
"What we would like to see is the bidding documentation actually be made part of the purchase order," McGinnis suggested. "That bidding documentation needs to go hand-in-hand with the order being issued in the first place."
He suggested tighter controls on purchasing cards, primarily by lowering spending limits.
And, as a final suggestion, he recommended the board attempt to keep a closer eye on student activity accounts.
"This is an item that plagues every district in Missouri," he said. "A school the size of Jefferson City has 300 to 400 accounts with active balances. It's incredibly difficult to train that many people effectively in the district's policies."