1. INDEPENDENT AUDITOR’S REPORT JUNE 30, 2014 ISD #413 Marshall Public Schools HOFFMAN & BROBST, PLLP

2. District Highlights Expenditures exceeded revenues by $68,000 in the governmental funds. No short term borrowing required. General Obligation School Building Bonds, Series 2003A paid in full in FY 2014 with proceeds from advance refunding bonds issued in prior year. Meritorious Budget Award for the 2014 budget. Certificate of Excellence in Financial Reporting for the FY 2013 Comprehensive Annual Financial Report. June 30, 2013 financial statements restated due to GASB Statement No. 65 implementation.

3. The District’s Future… In 2011 a 5 year extension of the operating referendum was passed. The referendum in 2013 for technology and safety/security failed. Expecting an increase in the formula for general education aid in FY15 along with funding for all-day every-day kindergarten which has been a District program since 1999. Facilities study is in process due to demographic study in January 2014 and projected enrollment growth. Potential to modify and replace HVAC systems with Quality Zone Academy Bonds (QZAB) financing.

4. District Enrollment Continued good news…the District’s trend shows that enrollment is increasing!

5. 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.

6. 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.

7. Sources of funding are fairly consistent throughout the years. Higher state funding in 2014 due to increase in general education and special education aids. Decrease in local funding in 2014 due to the state tax shift.

8. Largest use of dollars for any school district is for salaries and benefits.

9. Types of expenditures are fairly consistent throughout the years. OPEB bond issue resulted in higher recorded employee benefits in 2010. Transportation costs are still a large portion of purchased services.

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