ISD #413 Marshall Public Schools Independent Auditor’s report June 30, 2016 Hoffman & Brobst, PLLP

District Highlights Expenditures exceeded revenues by $3.87 Million in the governmental funds. This is mainly due to costs incurred for the construction projects. Capital lease financing of $854,325 for technology upgrades and a van. Capital and health and safety improvements began in the current year. Expected to be completed in FY 2017. Meritorious Budget Award for the 2016 budget. Certificate of Excellence in Financial Reporting for the FY 2015 Comprehensive Annual Financial Report.

The District’s Future… Expecting an increase in the formula for general education aid in FY17 . School Board authorized additional new Board approved referendum authority in the amount of approximately $32.51 per adjusted pupil unit. This shall be applicable for three years beginning with FY 16. A building bond referendum was held in May 2016 and was defeated. Surveys and studies are now in place with hopes of bringing the bond referendum back to voters in Spring of 2017.

District Enrollment Continued good news…the District’s trend shows that enrollment is increasing and is expected to keep increasing in the future!

The fund balance in the General Fund increased, as did the District’s available cash balance. The District has not issued Aid Anticipation Certificates since FY12.

Largest source of revenue is from the state. Federal revenue sources are a small percentage of income but are the cause of the most compliance requirements.

Sources of funding are fairly consistent throughout the years. Higher state funding in 2016 due to significant increase in basic formula and also in enrollment. Decrease in local funding in 2014 due to the state tax shift.

Largest use of dollars for any school district is for salaries and benefits. The District entered into significant capital lease purchase agreements in both 2015 and 2016.

Types of expenditures are fairly consistent throughout the years. Transportation costs are still a large portion of purchased services.

Instructional costs (both regular and exceptional) account for the majority of the District’s expenditures.

Fund Highlights Food Service Fund fund balance increased about $13,700 due to slight decline in cost per meal served, increase in enrollment from FY15 to FY 16, and increasing participation in meals. Community Service Fund fund balance increased about $36,000 due to higher than expected funding for ABE. The Building Construction Fund decreased about $4.5 Million due to expenditures for the construction projects.

Fund Highlights Debt Service Fund revenues exceeded expenditures by about $11,000. OPEB Debt Service Fund had a modest increase in fund balance. OPEB Revocable Trust Internal Service Fund incurred a net $23,000 net loss on investments and paid the General fund approximately $50,000 for employee benefits.