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November 23, 2022

 

 

 

 

  • Juab School District doing well financially, says audit report

By Myrna Trauntvein
TN Correspondent

There were no findings in the audit report for the Juab School District and the annual independent audit revealed that the district financial matters were in excellent condition.

Matthew Christensen, CPA, Audit Manager at Squire and Company, PC, presented the audit ended June 30, 2022, to the Juab School District Board of Education at their Wednesday meeting.

“Overall, this is a great report,” said Christensen. “Some may call it boring, but that is what you want.”

He said that the district had complied in all ways and that there were no findings.

An audit finding means a written summary of all instances of significant non-conformance with comprehensive audit standards and all significant areas of concern are then identified that, in the independent auditor’s judgment, merit further review or education.

This year, as a new requirement, the independent auditor’s report was given first as Christensen reviewed the report with board members.

“In our opinion, the accompanying financial statements...present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the District as of June 30, 2022...,” said Christensen.

In the Management’s Discussion and Analysis (MD&A), prepared by Darin Clark, district business administrator, financial highlights of the year were presented.

“The district’s total net position was $26.3 million at the close of the most recent fiscal year, most of which is invested in capital assets,” stated the MD&A.

During 2022, the district’s expenses totaled $28.8 million and revenues totaled $40.1 million.

The district is dependent on revenues from property taxes and state and federal grants: property tax revenues totaled $11.3 million in 2022, an increase of $1 million compared to the prior year and state and federal revenues totaled $22.8 million in 2022, an increase of $3.1 million compared to the prior year.

The district’s basic financial statements comprise three components: government-wide financial statements, fund financial statements and notes to the basic financial statements.

“The largest portion of the district’s net position ($20.9 million) reflects its investment in capital assets (e.g., land, buildings, and equipment net of accumulated depreciation) less any related outstanding debt (general obligation and lease revenue bonds payable) used to acquire those assets,” stated the MD&A.

The district uses these capital assets to provide services to students so they are not available for future spending and cannot be used to liquidate liabilities.

The largest expense for the district is for instruction at 63 percent, next is supporting services at 28 percent, school food services is 5 percent, community services is 2 percent and interest on long-term liabilities is 2 percent.

Property tax brings in just 28 percent of the revenues. Operating grants and contributions add 37 percent, federal and state aid not restricted to specific purposes makes up 20 percent, capital grants and contributions makes up 11 percent, earning on investments and other local is 3 percent, and charges for services is 1 percent.

There are three major governmental funds, said Christensen. The first is the general fund which is the district’s primary operating fund. It accounts for all financial resources of the general government except those required to be accounted for in another fund.

“The debt service fund accounts for resources accumulated and payments made for principal and interest on general obligation school building funds,” he said.

“The capital projects fund accounts for resources accumulated and payments made for the acquisition and improvement of sites, construction and remodel of facilities and procurement of equipment necessary for providing educational programs for all students in the district,” Christensen said.

The use of the term “Undistributed Reserves” was eliminated in 2010 with GASB 54. The term is better known as “rainy-day” funds and is reported as restricted or unrestricted.

A local school board may adopt a budget with a reserve. The reserve may not exceed 5 percent of the maintenance and operation budget adopted by the board in accordance with a scale developed by the State Board of Education. The scale is based on the size of the school district’s budget.

“The net investment in capital assets, in the unrestricted funds is $1 million, and in restricted funds is $5.3 million,” said Christensen. “That leaves the district with a net position total of $26.3 million.”

He said that an auditor’s responsibility was to exercise professional judgment and maintain professional skepticism throughout the audit, identify and assess the risks of material noncompliance, whether due to fraud or error, and obtain an understanding of the district’s internal control over compliance relevant to the audit.

A report was also required because of the Education Stabilization Fund managed by the Department of Education for COVID-19 that was one-time money, he said.

“Is it just me, or does the report seem thicker than it used to be?” asked Dale Whitlock, board president.

Over the years, said Christensen, it had grown four or five pages because of changes in retirement reporting.

“Darin does a fantastic job,” said Christensen.

Clark said that he also appreciated Christensen and his staff.