JSD 117 Receives Less Than Stellar Audit

By Benjamin Cox on December 11, 2022 at 9:33am

Jacksonville School District 117 saw a drop in designation on their financial audit for Fiscal Year 2022.

A two-point drop in score from their financial audit was largely due to the district spending more this past fiscal year and the recent bond sale, according to Principal CPA Suzanne Steckel of accounting firm Zumbahlen, Eyth, Surratt, Foote & Flynn: “You guys have always been, as long as I’ve been coming in…and probably years before that, always coming in at recognition [status]. This year we dropped down to the review [level] at [a score] of 3.35. So in order to be at recognition, you have to be somewhere in between a 4.0 and a 3.54. A couple of things that changed was your expenditure-to-revenue ratio. I mean you guys had money that you were trying to spend, improvements you were trying to do. You had the bond. So, this year at June 30, 2022, you spent $1.15 for every dollar that you brought in, where the year before you were spending 94 cents for every dollar you brought in. In order to get back up to a 4 [rating], you have to spend less than a dollar…so you are spending less than you are receiving is the whole point. And then, the other one that changed is your percentage of long-term debt. You’ll see it’s [rated] at a 1. It was a 2 last year, and that’s just all due to the bond issue that you guys just did.”

Steckel also recommended some clean up of some internal controls at the district: “There has been some turnover in the payroll department. There’s been some issues with the TRS reporting. So, I think that if somehow you can come up with some sort of a review process or something to make sure that those reports are getting filed accurately would be very advantageous. And then, we noticed…we test a sample of expenditures, so we also look at purchase orders. We noticed that the purchase orders…there were some purchase orders that were being issued after the purchase. So, you know, really the whole process and the whole internal control is that the purchase order gets done before a purchase is made. The other things is, is that we recommend in your purchase order system…it’s set up for passwords but it’s not setting up to change those passwords. So, you know, just to have those passwords update occasionally, every 6 months, every 60 days…whatever you find works for the district [is recommended].”

Steckel says the district did have one finding where there were some funds that were over budget. Steckel says she is working with District Treasurer Richard Cunningham to work to make sure that all of the district’s expenditures are accounted for when the amended budget is published in June of this coming year.

Superintendent Steve Ptacek largely attributes some of those over-budget funds due to the property tax payment coming in July instead of June this year: “Our revenue this year was lower than our expenditures, and that is due to the property tax that we were getting each year in June, which would have gone into last year’s fiscal year and it was delayed until July. So it’s going into this fiscal year. Therefore, we’re almost $9 million short for the revenue for last year. It doesn’t impact our fund balances at all, but it does make last year’s fiscal year look as if we over spent. It’s definitely really marked on the one financial profile that says ‘Hey, you spent more money than you brought in.’ But, next year it will be back on track and back to a 4, which is the highest ranking.”

Steckel did note in the district’s financial profile that the property value in the district increased by 1.9% from the previous year, average daily attendance of number of students increased, and the district’s overall cash balance and capital outlay all increased to help offset the $10 million property tax payment shortfall in the previous fiscal year. The district’s annual financial report will be completed and submitted to the Regional Office of Education by December 14th.