The Atlantic Community School District’s finances are solid, but some areas need to be watched closely. That was the word Monday night from Gary Sinclair, Senior Financial Adviser for PMA Financial Network.
Sinclair presented financial information from the IASB (Iowa Association of School Boards), and a lite Financial Planning Program (FPP) from PMA. He said a summary of the district’s financial data takes a “Big picture” look at how money was spent, where it came from, enrollment trends, cash and unspent balance trends. Enrollment, he said, is one of seven “Key indicators,” of a district’s financial health, as well as the “Solvency ratio,” which, for Atlantic, is 8.6-percent for the current Fiscal Year.
He said the data shows the rate is “slightly down” for Atlantic, which Sinclair says is okay, because “You can’t always have an upward trajectory, it’s gotta be up and down. The recommended range is five-to 15-percent, not to exceed 25.” In FY 2011, Atlantic’s solvency ratio was 9.1%. The highest was in 2008, when the ratio was 14-percent. The current ratio, according to Sinclair, is in-line with what a bulk of other districts are experiencing. In the area of revenue expenditures, Sinclair said the Atlantic District spent 101.5% of revenue, which is healthy, but could be a problem in the future. He said almost every district has spent more money than they took in, because of the cuts in funding they experienced. He says Atlantic is healthy right now, but if overspending continues every year, that will create “some issues.”
Atlantic’s Unspent Budget ratio in FY 2012 was 25.3%, which is down from 28% in FY 2011, but still at the high end of the recommend amount. Sinclair says the recommended range is 5-to 15-percent, not to exceed 25. He said most school districts are in the same boat, a situation he blames in part, on a “Lack of Direction from the legislature.” Even so, he says the district needs to watch how much it has available in unspent budget authority. The Atlantic School District was on par with other districts, as far as its Salary and Benefit ratio, but it needs to watch its spending.
He said also, the district needs to keep tabs on overspending its revenues. In three of the last five-years, the district has overspent its revenue, which Sinclair says “Is not unusual,” and what it should be doing to “Some extent,” but it needs to watch its spending authority closely.