Sept. 27 Board Meeting - FY 04 Audit Report

A presentation of the audit report for FY 04 was made at this Board meeting. The audit showed that the District is on Regulatory Basis, due to the fact that we don’t adhere to GASB (Governmental Accounting Standards Board) 34 standards. This is not uncommon for school districts; many other districts have not adopted these standards either. The audit report did suggest, however that GASB 34 standards will likely be required by the State of Illinois some time in the future.

The audit showed that, overall, the accounting looked good, though we do not use GAAP (Generally Accepted Accounting Principles). If, or when, Illinois requires the District to use GASB 34, we will also have to start using GAAP.

The audit showed the District running a deficit of $550K across funds for FY 04 due to McHenry County’s late distribution of tax funds. It also showed that the Education Fund would have run a deficit even if the funds had been distributed on time.

Board President Paula Zasadil asked Supt. Hill if the District is compiling a list of fixed assets. Hill responded that the appraisal company, Industrial Appraisal, would charge the District $5,600 to compile this list, and the District decided against going forward. He said the District does have a list of where computers in the District are located, and that he has never been in a school district that used a fixed asset system. President Zasadil asked Hill to compile quotes for building a fixed asset system, and to present the quotes to the Board at next month’s meeting. The auditor agreed that a fixed asset listing is a good idea, as items are often added to ad hoc lists over the years but never removed, and that fixed asset listing would be required by the GASB 34 standard.

The audit also showed that the Social Security fund had gone into a negative balance, which was not allowed by Illinois law, even though the late tax distribution was the cause of the deficit. Supt. Hill remarked that the Board approved an interfund loan during this meeting, but the auditor cautioned that such loans should be made before the fund goes into deficit, while acknowledging that this is not always able to be done due to the meeting and tax distribution timelines. Hill noted that, though they knew the county would be late with the distribution, they thought they would be getting more money than they did at this time.

The Board approved the audit report on a vote of 7-0 (all members present).