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Cd'A schools have fund balance surplus

MAUREEN DOLAN | Hagadone News Network | UPDATED 11 years, 7 months AGO
by MAUREEN DOLAN
Hagadone News Network | October 17, 2013 9:00 PM

COEUR d'ALENE - Preliminary results of the final audit of the Coeur d'Alene School District's budget for the 2012-13 fiscal year show a fund balance that is higher than school officials expected.

Superintendent Matt Handelman told The Press the audit has not yet been finalized, but the independent accounting firm of Magnuson, McHugh and Company has alerted the district to the finding.

The fund balance represents money left over once all accounts have been settled, and after the district knows how much it will receive from the state. By local policy, the Coeur d'Alene School District maintains a fund balance of 5 percent of its budget that serves as a restricted contingency reserve. The fund balance is generally slightly higher than that, allowing a greater cushion for the district to rely on in the event of an emergency. Potential unexpected additional fund balance dollars become part of teacher contract talks each year.

"During negotiations, we said right away that it was going to be higher," Handelman said. "Wendell (Wardell, the district chief operating officer) said right off the bat that we are confident we are going to have $856,000 more."

Handelman said they didn't know how much higher the fund balance would be, but they did expect it to be higher than the $856,000.

During teacher contract negotiations, which ended in August, the board's negotiating team and the Coeur d'Alene Education Association reached a memorandum of understanding about how funds would be spent if the district's audited fund balance exceeds a projected amount of $4.9 million. The agreement also requires that the district's state funding based on student attendance remains at a certain level.

The memorandum of understanding specifically details how the first $737,000 will be disbursed.

Under the agreement, the first $84,000 will be used to partially restore a cut to the district's contribution to employee family health insurance premiums. The district will contribute 69 percent. The teachers agreed to slashing the contribution from 71 percent to 68 percent contribution during last summer's negotiations.

The second $222,493 will go into the district's contingency reserve.

The next $284,493 will be distributed to all benefited employees, as a one-time payment, based on the amount of hours they work.

Another $146,000 will pay for buses under the agreement.

Anything remaining, beyond that $737,000, will also be distributed as a one-time payment to benefited employees based on the number of hours they work.

Every year, for the past few years, there have been similar memorandums of understanding in place because during negotiations, the fund balance is always an unknown.

Last year, the fund balance was about $1.3 million higher than expected, Handelman said. Under that year's agreement, the district and the teachers union agreed to split the remaining money, with the employees receiving a one-time payment.

"This year it's bigger. We didn't expect it to be as much as last year. It's a pleasant surprise," he said. "There is a question now, do we have a pattern?"

For several years during the recent recession, the district intentionally built up its fund balance, and teachers agreed to decreases in their benefits package, Handelman said.

The excess funds are likely the result of the district tightening its financial controls, and not losing money, he said.

Handelman said he alerted the board members to the situation, and notified teachers association leaders.

The official audit will be released Nov. 4, during the district's next regular board meeting.

"This is a good problem to have," Handelman said.

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