To: Michael Green, Superintendent
From: Stacy Brown, Director of Business Services
Subject: Financial/Enrollment Report
Date: January 22, 2024
I was going to work on a complete review of revenues, expenditures, and projected fund balance for this month. As a reminder, apportionment amounts are based on budget through December and updated to actual in January. Because enrollment is less than budgeted, I would like to wait until I get the January apportionment report so that I can provide the most accurate information. Full projections will be presented next month through January financial information.
I am caught up with all entries for December and have the December reports up to date for all funds. I have been working on a way to compare the monthly revenues and expenditures to projected revenues and expenditures, based on the budget. That sheet is what I will be using for the remainder of the year to identify monthly differences from projected (pages 2-5 of the presentation).
The sheet was prepared using financial information for 3 years. Normally I would use the past 3 years, but with Covid we had a few years that were not exactly normal in regard to monthly revenues, payroll and accounts payable. For 23-24 calculations, I used the averages of 18-19, 21-22, and 22-23 to determine the percentage of the whole for each month. I then multiplied each month average by the budgeted revenues, payroll and accounts payable to project how much is expected each month (page 2). In the example based on the 3 year averages, payroll accounted for 82.03% of total expenditures and accounts payable accounted for 17.97% of the total expenditures. September payroll is 8.01% of the annual, and September accounts payable is 2.01% of the total for the year. The same calculations were made to project monthly revenues. As you can see on this page, revenues are much less consistent than payroll and accounts payable each month. Each month the total revenues and total expenditures are compared to projected and also compared to percentages of the prior year. Each month the cumulative revenues and expenditures will be compared to projected and to the prior year to identify anomalies.
September (page 3)
Revenues were $360,000 higher than projected. In reviewing the September revenues compared to previous year, the apportionment, Special Education and Transportation allocations were greater than projected, due to changes in the formula over the past 2 years and due to such a large increase in the transportation allocation. OSPI paid $95,000 (front loaded) for the Columbia Elementary meal program. It is a new legislatively funded program and I am not sure why it is funded this way, but that accounts for some of the difference. The spreadsheet is projecting tax revenues as though we would be receiving them for the full year. I expect the fall months of the year to be much greater than projected and the spring months to be much less than projected.
Payroll was approximately $56,000 less than projected. Teachers are paid for 6 professional development days and in the past 3 years, all of these days were worked in August and paid in September. This year, they only worked 5 days before school started. The 6th day will be paid in February (work day is 1/12).
Accounts payable was $124,000 less than projected. In previous years, payment was made in September for a new curriculum and also for some software programs that the district is no longer using (due to the levy failure). Bulk fuel costs for September in previous years were considerably more than what was paid this year.
The percentage of revenues collected and expenditures paid are reasonable, based on the explanations above.
October (page 4)
Revenues were $337,000 greater than projected. We received almost $70,000 for paraprofessional professional development that we are required to provide for all paras. This is only the second year we have received these funds, so not very much was projected. Levy funds have increased considerably since 18-19 (at least the fall projections), so the amount of tax revenues were about $370,000 greater than projected. The overall revenues for this year are budgeted at less than last year, but our apportionment revenues (apportionment, special education, transportation) are greater than last year. Because the projection looks at the monthly revenues and projects them based on history, it is projecting less apportionment revenues that we are receiving. In previous years, we received federal grant claim reimbursements, but with the timing of approval of many of our grants, we did not receive any federal grants in October. This decreased the amount of revenues greater than projected.
Payroll was $62,000 greater than projected. In previous years, we had many unfilled paraprofessional and bus driver positions, so the percentage of the whole was less in October. We have more budgeted positions filled this year.
Accounts payable was $71,000 less than projected. In 2018, we purchased a vehicle for $25,000, and we purchased approximately $75,000 in curriculum. In 2021, we had $46,000 in maintenance projects and $30,000 in HVAC project costs. These items increased the projected amount to be greater than the actual.
November (page 5)
Revenues were $435,000 greater than projected. In November, we received $502,000 in ESSER funds for claims. The projected amount for ESSER was $37,000. This accounts for the majority of the difference between projected and actual. The same apportionment items (increases) noted above, and the timing differences (decreases) offset each other without making much difference overall.
Payroll was $147,000 greater than projected. In November, we settled with the KWRL union. This increased their hourly rates (greater than budgeted, which will affect every month). We paid the increased wages retroactive back to the start of school year (wage differential for all hours paid from 8/11/23 through 11/10/23 plus 3 months on their annual contracts).
Accounts payable was $216,000 less than projected. In prior years, we paid for technology, HVAC upgrades, and some large maintenance repairs, which accounts for the difference. Also, for 23-24, salaries and benefits make up a larger portion of the total expenditures. This accounts for the monthly differences to projected for accounts payable (less than projected) and payroll (greater than projected).
December (page 6)
Revenues were $464,000 greater than projected. One area that has been much greater than projected each month is interest income (from investments). The total amount budgeted for 23-24 was $90,000 and through December we have already received $81,000. This month, the average of the past 3 years was $8,500 and we received over $36,000. In December this year, all of our Federal grants were approved, and I was able to claim 3 months of expenditures for Federal Special Education and Title One. This accounts for approximately $190,000 of the difference between projected and actual. We have also gotten more consistent in billing the KWRL districts (which we started billing in November and will continue each month).
Payroll was $94,000 greater than projected. The KWRL increases that were greater than budgeted accounts for some of this difference as well as the higher percentage of payroll vs accounts payable for expenditures this year. I will be taking a look at all expenditures when I complete the full projections next month. This may point out some detailed reasons why the payroll is consistently greater than projected.
Accounts payable was $218,000 greater than projected. In December this year, we paid almost $300,000 for HVAC upgrades.
I included the December Budget Status reports for each fund (slides 7-11). Based on the projection and actual calculations above, revenues and expenditures for December are in line with the budget. As mentioned above, projections will be coming next month. Budget Status reports for the rest of the funds are included and I do not see anything that is not expected. If you look at the Debt Service Fund report (page 9) you can see the effect of refunding the bonds under Other Financing Sources ($21,599,229) and Other Financing Uses ($21,913,067). We also make our bond principal and interest payments in December, so the fund balance is at the low point of the year ($673,567). With the exception of the ASB Fund, there has been very little activity so far in the other funds.
Enrollment
The first enrollment document (slide 12) shows a comparison of average FTE compared to budgeted FTE. Funding is based on FTE (not headcount), so this is an important document. Funding is based on our average annual FTE (which includes September through January at this time). For January, we are 35.31 below budget, and the average for the month is 22.99 below budget. The decrease between December and January was 18.91 FTE. The January count of 2,272.69 is 13 FTE below the average. I am hopeful that enrollment will not continue to drop as the year continues (February is normally a bit higher than January with the change in semester). Even if enrollment stabilizes through the remainder of the year, we will end the year at approximately 30 FTE below budget. This will definitely have a negative effect on the ending fund balances. You also see the Special Education enrollment numbers and how they compare to budget. Special Education enrollment average is figured from October through May. The numbers you see here are for 4 months, and we are 1.25 over at Pk and just 3.00 below budget at K-21. I will let you know how this affects the district projections, starting with January data in February.
The document (page 13) is a summary by headcount for January, with a comparison to December. The counts by grade level include the Yale, LRA, and TEAM High numbers (all totals for the district). The section below shows the total January headcount for those buildings compared with the previous month's headcount. Overall, we are down 19 students from December. Normally, we see decreases at the high school level and specifically at TEAM High. However, this month, the decreases are spread out among almost all grade levels.
Please let me know if you have any questions.