Wednesday, December 18, 2013
The Berkeley County School District is in good financial shape according to a recent financial audit.
The school board met in regular session last week at the district office in Moncks Corner.
Larry Finney, of Greene, Finney and Horton gave the school district an “Unmodified Opinion” following his firm's audit of the school district's finances.
The new audit vernacular is a change from the previously used “Unqualified Opinion,” that Finney said was sometimes confusing.
“We changed the audit terminology because the old term was sometimes confusing,” Finney said. “Regardless how we label it, unqualified or unmodified, the district has received the best rating the you can receive in an audit.
“The bottom line is it still doesn't get any better than this.”
High points of the audit included the $2.3 million increase in the General Fund balance, of which $2.2 million went back into the district earmarked for next year's budget.
“Your General Fund balance is currently at 16.4 percent of your 2014 budget expenditures,” Finney said, “(That is) about two months worth of funds on hand in the event of an emergency. For a coastal county school district, anything above 16.7 percent is considered a healthy fund balance.”
Finney said the 16.8 percent was a good starting point.
“It's a minimum,” he said. “You guys should be pleased ... all of these monies we're talking about here are restricted by the state and federal government in how they can be used.”
According to Finney, the major reasons to maintain an adequate fund balance include maintaining a solid cash flow through the second half of the calendar year.
“Property taxes are cyclical,” he said.
Also it's important to have adequate funds on hand in the event of significant emergencies and unanticipated expenditures; flexibility for discretionary funding needs; and the potential for better interest rates on debt issues, which can save the school district money.
A healthy fund balance also covers potential shortfalls from the state due to budget cuts or as a result of the change in legislation, such as when residential property taxes were eliminated and replaced by the state with a one-cent sales tax increase.
“A healthy fund balance is extremely important given these uncertain economic times,” Finney said.
Finney concluded by saying the Berkeley County School District was in good financial condition as of June 30, 2013.
“The unmodified opinion is the best opinion you can receive,” he said. “You should be very pleased with the results. Just continue to do what you're doing.”
Berkeley County Superintendent Rodney Thompson said the unmodified opinion was good news for the district.
“I know there is a lot of work from a lot of people in preparing this audit and we as a district appreciate the hard work you do to prepare this,” said Thompson.