Boyle County School District received a pretty glowing annual audit from its CPA last week. Accountant Denise Keene told the board Thursday the district received “an unmodified opinion,” which is the “best opinion you can get,” which means “that your financial statements are presented fairly in all material respects.” 

“I want to tell you that I brag on your district regularly,” Keene said. “You have some of the best procedures in place. I love the way that you approve purchase orders, the detail that you have for every transaction to make sure that it’s appropriate,” and that the district is commended for its procedures. 

Keene went through a summary of the report, pointing out what she felt are highlights. The unassigned fund balance is just over $8 million, which she says is “wonderful because … we moved over $870,000 from the general fund to construction last year, and even with that, we still improved our unassigned fund balance.” 

However, the district spent $258,000 more than it took in, which was attributed to the transfer for construction. Keene said this was not something the district needed to be concerned about. 

Keene wanted to spend some time talking about food service.

“We have to pick up the unfunded kitchen liability,” which she says “makes the numbers look bad, but they’re really not bad.” The cash fund for food service is $274,000, which she said is down a little from the prior year. She said this is due to the accrual of the unfunded kitchen liability. 

Keene also pointed out that the state’s share of the net pension liability — funding for teachers’ retirement — went down from $113 million in 2018 to $56 million in ‘19. “So, that’s exciting,” she said. “We’ve basically cut our unfunded liability by half. And it is the intention … of the teachers’ retirement to do that for the next several years, and the hope is by 2025, that will be down to zero. … We’re actually making some progress in funding that pension liability.” 

Superintendent Mike LaFavers said, “I don’t think that can be stated loud enough, with all the news about pensions underwater, the trajectory that they’re on is by 2025, it could be zero, if they stay on the path they’re on.” 

LaFavers said the district has worked five years with Keene for its audits, and thanked her for being so thorough and teaching them along the way.

“You’ve helped us improve our processes. I want to thank you for five really good years,” he said.

The Kentucky Department of Education recommends that after five years, the CPA contract be bid out again, LaFavers said. “Hopefully the next person we have will be as good as you’ve been for us.” 

Keene said Boyle is “definitely one of my favorite districts, because your internal controls are really very good, and that means a lot to me, because I want to make sure that you are improving and doing well. I think we have made some progress together.” 

Board member Steve Tamme said he appreciated how Keene used the terms “our” and “we” during her presentation. “It feels like that you’ve been really good for our schools.” 

Other highlights the audit reported included: 

• Beginning cash balance was $41,584,138; ending cash balance (including activity funds) was $31,505,619
• General fund had $26,726,135 in revenue, which mostly consisted of SEEK (state funding), property, utilities and motor vehicle taxes; there were $26,102,095 in general fund expenditures, including on-behalf payments of $7,300,427. 
• The ‘18-’19 school year produced four 4-star schools (Perryville and Woodlawn elementary schools, and Boyle County middle and high schools) under the new accountability system, and one 5-star school (Junction City Elementary School). Perryville Elementary also became a blue-ribbon school, one of 362 nationwide recognized based upon performance measures. 
• The district’s assets exceeded liabilities by $2,298,320 as of June ‘19. The largest portion of the district’s net position reflects its investment in capital assets less any related debt used to acquire those assets that is still outstanding. These assets are used to provide services to students, and are not available for future spending. 
• No transactions were noted as having a lack of authoritative guidance or consensus — all significant transactions have been recognized in the financial statements in the proper period. 
• Depreciation expense was noted as being the most “sensitive estimates affecting the financial statements.” The report states the “estimate of depreciation expense is based on the estimated useful lives of the fixed assets,” but are recognized as being “reasonable” in relation to the financial statements taken as a whole.
• Misstatements were identified during the audit and corrected, except for additional accounts receivable of $12,587.