Last week the Grosse Pointe Public Schools received the independent financial audit for the 2013-14 school year. I have prepared an analysis of the audit in the slide deck embedded here.
The 2013-14 financial year was particularly critical because it began with just $2 million in fund equity. Also the district ran a $3.5M deficit in 2012-13. The 2013-14 audit shows a dramatic turnaround. Here are some highlights from the 2013-14 audit:
- The district ran a $3.7M budget surplus when it had expected to run a $2M surplus. This ended a four year run of annual deficits that saw fund equity lose over $18M (details on how here.)
- Compared to the previous year, 2013-14 revenues came in $464,000 higher and expenses dropped by $7.8M – undoubtedly the single largest annual expense reduction the district has ever seen. This puts the district a year ahead of schedule in the quest to return to 10% fund equity.
- If the district could maintain expense controls in the current year (2014-15) consistent with last year, fund equity could increase by $4M and fund equity would end 2014-15 at 10% – two years ahead of schedule.
Bottom line for now: There is more financial capacity in the general fund than had been expected. The knock on effect is that the district now has a budget source to continue to address technology issues – including looking at cloud based services and leasing which will have no capital investment requirements and would not be allowed in a bond based funding model.
It would not be unreasonable to earmark $1M in additional general fund budget annually to make great strides in this area. Any further talk of a tech bond should be received with very healthy skepticism. (For reference, see my post on addressing district technology needs without a tech bond.)