RIPLEY - An independent auditing firm has given the Ripley Central School District good marks for its financial management during the 2011-12 fiscal year.
Wayne Rischell of Buffamante Whipple Buttafaro, P.C., reviewed of the district's external audit with school board members recently. The firm discovered "no weaknesses in internal control (how the school conducts business)" and "no instances where the administration was out of compliance with its reporting," he said.
Rischell said Ripley has $13 million worth of assets, a decrease from $13.8 million the previous year. These are largely capital assets, such as buildings and grounds, and the decline is due largely to depreciation, he said. The district's liabilities, which mostly involve bonds and loans, have also decreased from $8.7 million to $8.1 million. The reduction came about because the district was able to pay more than $600,000 of the principal of its loans. Another cause of the fluctuation in liability was changes in accounting rules regarding how post-retirement benefits can be projected, he said.
Rischell also commended the district for saving a projected $865,000 over the next 20 years by refinancing several of its bonds.
Rischell told the board overall revenue declined during the year from $9.3 million to $7.4 million due to decreasing population within the district and reductions in state aid. Revenue from Erie-2-Chautauqua-Cattaraugus BOCES II decreased from $1.5 to $1.1 million. Overall expenses decreased from $8.3 to $7 million, he said.
Looking over the past five years, Rischell told the board the district's surpluses have offset its deficits.
"Keep doing what you're doing," he said. "You, as a district, have been very progressive as a small school trying to meet the challenges of these times."
Robert Bentley, board president, asked Rischell to explain the school's fund balance and why members of the public may misinterpret it.
"I think there is a huge misconception that the district has more funds it can use," Bentley said.
Rischell said the fund balance is like a savings account holding some money available for use and some money earmarked for particular uses. Ripley's general fund stands at about $3 million, down from $3.3 million the year before, he said. Of this, about $2 million in cash is left over at the end of the year. This is the fund balance.
Most of that amount is earmarked for various reserve funds, however, Rischell said. When a person collects unemployment, for instance, the state bills the district dollar for dollar so the school has "appropriately and responsibly" set aside $600,000 as unemployment reserve, he said.
Other reserve accounts in the fund balance include: retirement reserve, $300,000; worker's compensation, $200,000; capital needs for projected purchases, $170,000; employee benefit, $150,000; and tax certiorari when taxpayers challenge their property assessments, $150,000.
This leaves $540,000 to balance the budget and $280,000 left available for "what the board decides needs doing," Rischell said.
Rischell also said the district's food service budget contains a deficit, prompting the board to move $5,000 from the general fund to support it. Decreasing enrollment played a part in the deficit, but increased costs based on new state nutritional guidelines have also driven up costs, he said.
"What you're experiencing in food service is what everyone is experiencing," Rischell said.
The new guidelines call for more fresh vegetables and fruit as well as more healthy options. This has driven up costs, but driven down demand.
"What you're dealing with is maybe a little more unique than other districts, but it's basically the same problem," Rischell said.