Annual Report 2005-2006 - Farmington Public Schools

Financial UpdateThe District continually looks at ways to enhance revenue, implementefficiencies and examine ways to reduce costs.This is a report of the District’s year-end, unaudited financial results for the 2005-2006 fiscal year, which endedJune 30, 2006.The District is currently under audit by independent auditors, Plante & Moran, PLLC. The audit report willbe presented to the Board of Education on October 24, 2006. For the year ended June 30, 2006, theDistrict's unaudited, unreserved fund balance stood at $26,365,956 or 17.2 percent of expenditures.This fund balance, or reserve, would support the District a total of 32 instructional days if revenueswere curtailed.Unaudited revenues for 2005-2006 were $146,501,587 and expenditures were$153,140,544. Salaries and benefits of staff comprise 86.7 percent of the general fundexpenditures with all other expenses including supplies, purchased services, and capital outlayaccounting for the remaining expenditures. Expenditures exceeded revenues by $6,638,957.The June 30, 2006 financial statements are being prepared under the GASB StatementNo. 34 format. The Statement of Net Assets shows the communities’ investment inbuildings and equipment net of its related debt. The Statement of Activities matchesexpenditures with program revenue and shows which resources are used to fund theoverall operations of the District.Upon completion of the audit, the financial statements will be available forreview at the public libraries in Farmington and Farmington Hills, as well as at allDistrict buildings.For tax year 2005, the District was able to reduce its operating millage onhomesteads by .387 mills, or about 39 cents for each thousand dollars of taxablevalue. This year’s tax rate was 11.1596 mills plus six mills for education whichgoes directly to the State. This represents a decrease of 48.79 percent less thanthe rate paid in 1994 prior to Proposal A. This rate also includes the two millslevied for debt.The legislature worked hard to adopt a balanced State aid budget for fiscalyear 2006. This budget was the first in four years to receive an increase in thefoundation allowance to schools. The District continuously monitors the State’sfinancial condition as the revenue to schools is directly linked to the State’sfinancial condition. The legislature passed an increase of $210 per pupil for 2007.The State is required by law to have a balanced budget, and the District hasexperienced losses in funding two of the last four years of $69 and $74 per pupildue to prorations in State funding.The District's financial health requires that the District continue to be vigilant inbalancing the budget annually while still maintaining the quality instruction ourchildren deserve. For the past several years, the budget process has included waysof increasing revenue sources, examining operational efficiencies and looking at costreductions. The Board and staff will continue working hard to provide educationalexcellence and equity for all students within available resources.Senior drum major leads the North Farmington HighSchool Band in the parade at the Farmington/Farmington Hills Multicultural Multiracial CommunityCouncil’s annual Heritage Festival.12Michigan schoolsare dependentupon the Statefor about 52percent of theirrevenue for day-todayoperations.For the ninth year in a row, theDistrict has received theCertificate of Excellencein Financial Reporting fromthe Association of SchoolBusiness Officials (ASBO).This award indicates that theDistrict’s financial statementsmeet or exceed ASBO’scriteria for fulland expanded reporting.