St. Ignace School Finances in the Black, Auditor Says
By Paul Gingras

At its regular meeting Monday, October 8, the St. Ignace Area Schools Board of Education accepted a positive annual audit for the 2006/2007 school year, which stated that the district spent less than expected last year and was able to add to its savings. Unless the state increases school funding or a regional special education millage passes in November, however, the district will need to draw more than $90,000 from its savings to keep all programs afloat next year.

The district's financial analysis was presented by Ron Harris of the Traverse City-based Harris Group, who reported that the district emerged from the 2006/2007 school year with a general fund balance of $572,499, up $167,004 from 2005/2006.

The district simply did not spend as much as it expected, said business manager Kathy McLeod.

Last year, owing to a mild winter, the school had lower-thanexpected heating costs. Lowerthan expected fuel prices saved on bussing expenses. Maintenance costs were down slightly, and the district spent less-than-expected on health insurance, Mrs. McLeod explained.

This year's audit cost about $10,000, Mrs. McLeod said, compared to $17,000 last year by another auditor.

"Overall," Mr. Harris said, "I feel you are in pretty good financial shape."

He offered one recommendation to improve how the school handles its money. As Mrs. McLeod records financial transactions, Mr. Harris suggested she submit any expenditure over $5,000 to the superintendent for approval. Questioned by School Board President Jane Weiss, Mrs. McLeod determined that there are usually fewer than 10 transactions of $5,000 or larger each month.

Making sure more than one person assesses larger financial transactions would solidify internal controls and make the district finances safer, he said.

Based on the audit report, lower retirement rates, and savings realized by teacher retirements, Mrs. McLeod revised the district's projected budget for the year. The revision was accepted by the school board at the meeting.

The district expects to take in $6,246,444 in revenue and spend $6,337,771. To make up the difference, the district plans to spend $91,327 from its fund balance to keep all programs running. Earlier in the year, Mrs. McLeod projected that the district would need to draw $163,952 from its fund balance to keep all programs intact.

The district has based its financial plans on the same foundation allowance received from the state last year: $7,085 per pupil. The state foundation allowance amounts to approximately 90% of the district's funding.

This year, the district has calculated its revenue based on 750 students.

In 2007/2008, the state set a lower retirement rate, which will help the school financially, Mrs. McLeod said. Last year, it was 17.74%. This year it is 16.72%,

The district will spend less on some of its teaching staff this year, owing to the retirement of metal shop, history, and civics teacher Richard Silet, speech and language pathologist Liz DeWick, and special education teacher Donna Hardin.

Mr. Silet has been replaced by a new teacher who is lower on the pay scale. It appears the school will save money by contracting for a new language pathologist, and Ms. Hardin was replaced with a teacher from within the district's ranks. Ultimately, this is less expensive than hiring a new employee, Mrs. McLeod explained.

Regarding the administration's decision to spend a portion of its savings to keep all programs going, Mrs. McLeod said, "We will continue to do as much as we can for as long as we can."

The district's budget could be increased if it receives more special needs students, Mrs. McLeod added.

Superintendent Mike Springsteen acknowledged this in his report to the board, saying that the state requires schools to provide services for special-needs students but provides no additional funding to do so. Special-needs students receive the same per-pupil allowance from the state as students without special needs, he explained.

The special-education program at St. Ignace Area Schools costs $540,000, he reported, adding that the district receives $185,000 in per-pupil funding for its specialneeds students.

With these figures in mind, the board passed a resolution supporting a proposal by the Eastern Upper Peninsula Intermediate School District, which seeks to levy an additional 0.75 mills for special education throughout the region. The election will be November 6.

Mr. Springsteen noted that the same millage proposal was defeated, 3,309 to 2,924, in Chippewa, Luce, and Mackinac Counties last May, and said that and low voter turnout prompted the ISD to pursue the issue a second time.

St. Ignace school district voters approved the measure, 116 to 93.

If the millage passes, it will not solve all of the district's financial problems, he said, but it would nearly eliminate the deficit faced by St. Ignace Area Schools this year.

If the millage passes, it will provide approximately $97,000 in additional funding for special education in the district. To add perspective to the cost of the millage, Mr. Springsteen said the owner of a $100,000 home would pay $37.50 more per year in taxes. This amounts to about 75¢ a week, he added.

The district has received a host of comments stating that schools must be fiscally responsible, he added. In response, Mr. Springsteen reviewed the district's actions to save money in the past four years.

Since 2004, to keep its expenditures in line with its income, the administration has reduced its fulltime staff by 20%, Mr. Springsteen reported. The district reduced its staff by 10 teachers, one librarian, one cook, one bus driver/custodian, two secretaries, three classroom aides, and one principal.

Further saving money, the school board made cuts to the sports program. The current athletic director teaches more classes and spends 50% less time on sports than his predecessor, saving the district money, Mrs. McLeod said. The district also removed all freshman sports from the budget and stopped funding softball, baseball, and athletic bussing.