KCSD board hears positive audit report
MILL HALL — At Thursday night’s Keystone Central School District board meeting, the board heard three presentations about the financial state of the district.
The first was the independent audit report by Baker Tilly, the second was a wealth management presentation by representatives from FNB Bank and finally, a debt presentation by Audrey Bear. All were positive.
Baker Tilly’s audit was the most significant of the three. Joseph O’Neill, senior manager at Baker Tilly and Nicholas Ring, a CPA with Baker Tilly, made the presentation.
Both O’Neill and Ring spoke at length about the audit.
“This audit is an intensive process. We spent a lot of time on site with management and in the field performing audit procedures,” O’Neill explained.
Federal law requires a single audit. The audit, O’Neill said, required eight to 10 weeks of “field work” by Baker Tilly.
Some of the audits financial highlights:
— Overall positive variance from final budget to actual.
— General fund balance increased $1.4 million; in line with recommended guidelines.
— Cost of operations per day decreased by $19,000 or 4.5 percent; related to ongoing budgetary management.
— $1.8 million in principal paid on long-term debt; outstanding balance of long-term debt = $7.5 million as of June 30, 2019.
— GASB 68 Net Pension Liability of $11.5 million at June 30, 2019 (district’s “share” of the PSERS plan); OPEB liability of $22.5 million at June 30, 2019.
— One “finding” related to federal programs.
O’Neill also provided some analysis of the district’s general fund balance. Baker Tilly’s analysis said:
— At June 30, 2019, the total balance in the general fund was $12,005,735.
— This represents -16.4 percent of the $73.2 million general fund budgeted expenditures for FYE June 30, 2019, which is in line with what Baker Tilly would recommend.
— Baker Tilly recommends two months’ worth of operating expenditures (two months of operating expenditures equals $12.2 million or -16.6 percent.)
— $5 million of the general fund’s $8.9 million “committed fund balance” is committed for future PSERS rate increases.
“You certainly made progress with the general fund fund balance,” O’Neill said of the audit.
As far as the process was concerned, O’Neill said that it went rather smoothly.
“Our objective in performing this audit was to gain reasonable assurance. The concept of reasonable assurance is that we get to the point where we feel that we’ve done enough work, enough audit procedures that we give reasonable assurance on your financial statements. No auditor will come in and give absolute assurance that would require us to look at every single transaction, every single invoice, every single payroll check. We do a risk-based audit and get to the point where we feel that we can give our opinion with reasonable assurance,” O’Neill said.
The board will meet again at 6:30 p.m. on Thursday, Jan. 16 at the Central Mountain High School auditorium for its work session.