Harper Woods Schools receive positive audit report

By: April Lehmbeck | Advertiser Times | Published December 5, 2012

HARPER WOODS — After coming through a hailstorm of financial struggles in recent years, due to the flailing economy, many cities and schools take positive financial news with a dose of caution.

That’s exactly what Harper Woods School officials did when they discussed the district’s positive financial audit during a meeting Nov. 20.

The city fared well in the audit report and has had growing good news when it comes to its financial bottom line in the last year or so. Yet, the district sees possible trouble in the upcoming years, if it doesn’t continue to remain vigilant.

“As we look at our three-year projections, we do see a decline and an emerging concern, particularly in … I think it’s the 2014/15 fiscal year,” Superintendent Todd Biederwolf said. “We’re performing better on the short-term but certainly agree that we have long-term structural challenges.”

Brenda DeMott, a representative of the school’s auditing firm Rehmann Robson, presented the audit to the School Board during the meeting.

She had good news for the district, as far as the state of its financial recordkeeping.

“We did issue a clean audit report, which is an unqualified audit report for the district, meaning that there weren’t any significant or material (negative findings),” DeMott said. “That is good. That is what is wanted.”

She reviewed the fund balances at the end of the last fiscal year, including a more than $1 million general-
fund balance. 

The district managed to grow that fund balance with revenue outpacing expenditures by about $284,000 in the last fiscal year and more than $100,000 the year before. However, they did so by making some financial decisions to bring in more revenue and cut costs. 

They have been doing a number of things to find additional revenue streams, like teaming up with an outside educational company for an alternative school to bring in more funding.

School Board President Brian Selburn said, even though the district has managed to have two years in a row that they’ve had positive financial news, they are not out of the woods yet, when it comes to financial struggles.

“We’re not anticipating that for the forthcoming years,” Selburn said of the district’s ability to continue to see positive growth in the financial picture.

The district wasn’t facing such a rosy picture at the end of the 2010 fiscal year, when expenditures were outpacing revenue by about $873,000, according to the audit report.

The district’s undesignated fund balance of slightly more than $1 million means that the district has about a 7.5 percent fund balance, compared to its general-fund expenditures.

While that places the district above the minimum 5 percent recommended undesignated balance, the district has its own policy that shows it is falling short of its goals.

“The district is within that 5 to 15 percent range,” DeMott said. “Of course, it would like to be higher, but there’s definitely been some improvement over the last few years.”

“We have a district policy of 15 percent,” Biederwolf said. “We’re still significantly below that standard, which aligns with the federal standard.”