Swanville School District audit reveals tight situation

By Jennie ZeitlerStaff Writer


The annual audit report was presented to the Swanville School Board at Tuesday’s meeting.

Upon his retirement earlier this year, former auditor Gary Paulsen sold Swanville’s account to Schlenner, Wenner, who was represented at the meeting by Mary Backlund and Jon Archer.

The three findings listed in the report are common to most small school districts and cities. They pertain to a limited segregation of duties, financial statement preparation by the auditor and journal entries being made without management approval.

“The findings are pretty common for a district this size,” Archer said.

“It’s like that all over,” said Backlund.

The difficulties in the district’s finances were shown elsewhere in the report.

“The district needs to take a serious look at where the general fund is heading,” Backlund said. “Last year I suggested that a budget committee be formed, and it has met only one time.”

Swanville School District is nearing statutory operating debt.

“The undesignated operating fund balance is now at 2.5 percent,” Backlund said. “You do not have a lot of wiggle room.”

Districts and charter schools exceed their expenditure limitations when their net unreserved general operating fund balance at year-end (June 30) is a negative amount which exceeds 2.5 percent of their unreserved/undesignated operating expenditures.

Units that exceed this operating debt limitation are in statutory operating debt.

“The Swanville School District has experienced a drop in revenue of $964,000 from 2009 to the present school year,” said Supt. Gene Harthan. “We expected the fund balance to decrease $200,000 this year, but when it went down by $400,000 it was a shock. We’ve been living off the fund balance to avoid further cuts.”

“We knew the fund balance was going to go down,” School Board Member Chris Kircher said. “We did cut $150,000 from the budget.”

In 2009, Swanville had a fund balance of $900,000 and was receiving 90 percent of the state aid due them. Then the state began holding back aid funds, only giving 70 percent in 2010, 60 percent in 2011, and 64 percent in 2012.

Kircher suggested getting the whole Board involved with a finance committee.

“The takeaway from this is to keep an eye on budget actuals,” Archer said. “Keep your eye on the spending.”

“You have your work cut out for you,” Backlund said.


Other business that came before the Swanville School Board Tuesday included:

• Certifying the levy for taxes payable in 2013 at $791,583.17. This is the amount of the preliminary levy, and is a 2.97 percent decrease from the previous year;

• Approving the hiring of Brian Becker as junior high boys’ basketball coach;

• Discussing the resealing of the gymnasium floor over Christmas break, with Supt. Gene Harthan reworking lunchtime supervision to keep students off the gym floor after that;

• Learning that Minnesota is increasing the amount of state aid payable to school districts from 64 percent to 82.5 percent beginning with the Dec. 15 payment; and

• Hearing a report from the baseball/softball committee regarding field conditions. It was decided to go with a field layout prepared by engineer Mike Meyer. No school funds will be used for the field renovation.

The next regularly scheduled Swanville School Board meeting will be Tuesday, Jan. 15 at 7:30 p.m. in the school media center.