SANDPOINT — The Lake Pend Oreille School District received their annual audit report this week, earning a “clean” opinion for the 2018-2019 fiscal year.

“It’s a clean, unqualified opinion on your financial statements, no internal control findings, and no findings of non-compliance are the three big reports that are included in the audit package, so that’s great,” said Kris Mayhew, CPA with Magnuson McHugh & Company, who presented the audit report to LPOSD officials during Tuesday’s board meeting.

An audit, Mayhew said, is an examination and evaluation of the financial statements, in order to obtain “reasonable assurance that the financial statements are free from material misstatement.

Any entity receiving federal funds that exceed $750,000 are subject to a financial audit statement under Government Auditing Standards and Uniform Guidance compliance, he said. The district receives more than $3 million in federal funding and is therefore subject to audit each year. It is also a requirement under state statutes.

The district operates on a general fund budget of over $30 million, which Mayhew said is a “big undertaking” in itself. In addition, he said, each of the schools have funds, checks and receipts.

“We see a really strong oversight at all of your school sites, which is not something that we see at every district, so that really is a standout distinction,” Mayhew said.

The district finished the 2018-2019 fiscal year with a general fund balance of $4,812,999, an increase of $1,753,874. While the expenditures in the general fund were $491,481 higher than budgeted, the fund’s revenues were $1,753,874 higher than budgeted.

The increase in revenue was in part due to a higher attendance last year, as well as an influx of federal forest dollars, he said. Some of the significant expenditures included the purchase of three school buses and other district vehicles, as well as technology purchases, such as laptops for the schools.

Mayhew said every CPA likes to see increases in fund balance, and praised the district for their efforts in increasing that number over the last two years. The Government Finance Officers Association encourages districts and other agencies to have no less than one to two months of regular general fund operating expenses in their fund balance, he said. Mayhew said the district currently has 15.6 percent of its total expenditures and fund balance, or about 57 days of coverage.

“You are saving, you have more money coming in than you have coming out, you are planning for the future,” Mayhew said. “There is a lot of unpredictability sometimes with school districts and governmental agencies with what funding is going to be available, legislative changes, funding models, federal dollars, all of these economic factors can impact a district’s budget year over year.”

Board chair Cary Kelly said the district is on a “very sound financial footing” with the fund balance increasing, crediting the district’s chief financial and operations officer Lisa Hals and her team for their work.

“I know you are working with a bunch of unknowns every year … It is always a moving target, but I think you have really done a great job, so thank you,” Kelly said.

The audit report is posted on the district’s website at lposd.org