Grosse Pointe Schools grows fund balance

By: April Lehmbeck | Grosse Pointe Times | Published December 10, 2014

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GROSSE POINTES — The audit report presented to the school board late last month was good news for the district in terms of where the district is headed financially.

District officials managed to boost the general fund balance from June 2013 to June 2014, but they haven’t met their goal in terms of how much it wants to have in its rainy day fund.

“You did have an increase in your fund balance this past year,” Plante Moran representative Laura Claeys said. “We commend you for that, and we do realize that that success is the collaboration not only of the administration and all of the people who work for the district, (but) also the community and their support of what you’re doing here. That is a continued success, a collaborative success.”

According to the audit report, the district ended June 2013 with a $2 million fund balance and managed to increase the balance by $3.7 million to end with a fund balance of more than $5 million in June 2014.

It means that the district had a balance at the end of the fiscal year in 2014 of about 6 percent of its total expenditures for the year.

Some associations recommend that districts have between 15 and 20 percent fund balance.

“(That) is really a reach for many districts,” Claeys said.

Instead, Grosse Pointe Schools and many neighboring districts are shooting to grow their fund balances to 10 percent, which means that the district hasn’t met its goal yet.

“This just means there’s still work to be done, but you have a fund balance that doesn’t put you in dire straits where you have to make significant decisions on a day-to-day basis because you do have some amount of fund balance, but it is something that you should continue to monitor on a continual basis,” Claeys said.

She explained that while the more than $5 million fund balance might seem like a lot of money, it would only cover a few weeks of district expenses if the district stopped receiving its revenue.

The auditors explained that the majority of the district’s expenditures, more than 87 percent, is spent on salaries, and employee benefits and costs.

One growing cost for most districts is the cost of retirement contributions.

Overall, the district received a “clean opinion,” auditors said of the district’s financial recordkeeping. It is the highest opinion and offers reassurance to the community and school board, according to auditors.

Moving into the future, the auditors made some recommendations, including that the district continue watching what’s going on at the state level and work on maintaining the districts high credit rating in case they need a bond or other credit needs.

Board President Joan Dindoffer thanked Board Treasurer Brian Summerfield for his dedication to the audit process.

“I know you met with the auditors,” she said. “Thank you for your time and attention in looking at this.”

She also recognized the representatives of Plante Moran.

“Thank you for coming and presenting it, and good news,” she said.

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