The Shakopee School Board unanimously accepted a clean 2019-2020 audit report at its Nov. 23 business meeting. Its fund balance grew by $3.1 million, which was $1.7 million more than expected, but most of those gains are restricted funds that can only be spent on specific expenses such as facilities maintenance and buildings.
The unrestricted fund balance, which is the pool of money that can be used toward discretionary expenses, is sitting at about $3.74 million, according to the audit report.
The unassigned fund balance is up just $100,000 from last year, which was in line with the 2019-2020 budget. A healthy unassigned fund balance should add up to between 8 and 12% of the district’s projected annual spending, the opinion said.
Currently, the district’s fund balance represents 3.8% of its annual spending.
The district has long expressed under-funding from the state and the need for an operating levy in order to maintain its current level of operations and grow its unassigned fund balance. Earlier this year, $5.4 million in cuts were approved by the Shakopee School Board, which will be implemented due to the failed $9 million operating levy referendum.
Enrollment was down 90 students last year, and financial losses relating to the enrollment decline followed, since much of Shakopee’s funding comes from per-pupil state dollars.
The report’s communication letter also identified a “material weakness” within the district’s financial reporting which Matt Mayer, the auditor representing BerganKDV, said is normal for a small business office, and which the district also received last year.
Mayer at the Nov. 23 school board business meeting, said “in a perfect ideal environment we’d like to get four touches on everything that goes through the team, and with the limited number of staff it’s difficult to split that up in a way. We do believe the district has appropriate mitigation strategies, and I think you’re making the right decisions on that.”