The Kirby School District 140 Board of Education reviewed its annual audit prepared by MPS Certified Public Accountants at its Thursday, Oct. 19 meeting.
Ed McCormick, an audit partner for MPS Certified Public Accountants, presented an unmodified opinion to officials assessing the district’s finances for fiscal year 2017.
“This is the highest level of assurance that we as auditors can give and you, as a board, should be pleased hear to that,” he said.
The report notes that D140’s assets exceed its liabilities at the fiscal year’s end by more than $85 million, which includes its buildings and hard assets. That does not, however, equate to funds being available in the bank.
“Basically, the equity of the district is at $35 million, which is unrestricted at the end of the year,” McCormick said.
This past year, District 140 had an increase in its net position of $4.3 million. Officials accounted for some construction activity during this period, as well.
“I think there was over $9 million that went into construction,” McCormick said. “Well, that goes in as an asset, but those are dollars that were expended.”
The fiscal year 2017 budget showed expenditures exceeding revenues. From a funds perspective, those expenses were written off, whereas the entity-wide statements presented the information as a long-term perspective to note.
“At the end of the year, you did have a general fund balance… of almost a little over $38 million,” McCormick said. “Your balances are strong, but you have been spending some money this last period of time.”
The audit report highlighted discussion on the district’s bonds and capital assets.
McCormick said the good news is D140’s only debt is its pension liabilities, which is a result of the State not picking up its portion.
“Of all the districts that we do work for, you are the only district that have that has no bonded debt,” he said. “You are somewhat of an exception to the rule, which is a good position to be in… You have about $13 million of potential liability related to the unfunded retirement obligation between the Teacher Retirement System and Illinois Municipal Retirement Fund.”
McCormick stressed that pension liability debt is none of the district’s doing and said the unfortunate thing is it could come back to haunt the taxpayers.
D140 has put itself in a position to absorb a shift in pension costs, should the state relinquish its burden.
Union contracts for service employees and teachers are expiring in the 2020 and 2018, respectively. A new pronouncement will go into effect next year to add more liabilities regarding retirement benefits. There were no significant findings exhibited in the D140 audit.
Day care service discussed
Also at the meeting, officials took time to clarify day care center discussions held at the board’s September meeting.
Since that time, the district has been approached by residents expressing concern for the idea of introducing the service to its teachers.
“It got blown out of proportionate so quick,” board President Thomas Martelli said. “You’d swear we were moving schools. It was purely what the outline is to put a daycare in, and everybody on the board agreed to look into it. It cost us nothing to look into it.”
Martelli stressed that that’s why everything D140 has done is so preliminary to this point.
Superintendent Julia Mikulich echoed that sentiment.
“This could be a continued conversation [for] weeks, months and years and die out because we find out it’s too expensive, it doesn’t make sense, whatever it is,” she said.
Mikulich took a moment to outline the results of the general inquiry the board asked her to conduct at their September meeting.
Typically, a daycare center requires a room with two exits, 900-1,000 square feet of space, direct access to a fenced-in playground, accessible toilet rooms and a possible sink and refrigerator. A dedicated entrance and indoor play or commons area where children can play is another consideration to note.
Certain Department of Child and Family Service rules apply with children ages 3 and younger.
Discussions on the idea of introducing the day care service were tabled until a later date.