NEW ULM - District 88's operating (general-fund) revenue totaled approximately $20 million in the fiscal year 2012, and operating expenditures amounted to approximately $20.3 million, according to a financial audit released earlier this month.
The operating deficit of approximately $300,000 was a result of a school board decision to keep taxes down by spending part of the operating fund balance, the auditors said.
Years of deficit spending have reduced the unassigned fund balance consistently, from approximately $2.7 million in 2008, to approximately $1.5 million in 2012, shows the audit. It is now at the very low end of recommended levels.
The cash fund balance, net of short-term borrowing, was negative (approximately $1.7 million in the red) as a result of the state of Minnesota holding back school funding to ease state budget shortfalls.
Last fiscal year, the amount of this hold-back was 40 percent. It compared to 30 percent the year before and 20 percent the year before that.
The state budget-deficit reduction approach forced schools into short-term borrowing to meet cash-flow obligations (and into paying interest on short-term debt, making operation more expensive).
Also according to the audit:
* District 88 operational funding came from the following sources: 77.5 percent state aid; 15.5 percent local property taxes; about 4 percent federal funding; and about 3 percent other sources (such as fees).
The percentages reveal an increasing share of local taxes, compared to state funding, in the recent past.
* "Weighted average daily membership" (more or less a measure of enrollment that assigns more funding to older, versus younger, students) was slightly up from 2011 (2,290 versus 2,250 pupil units). These numbers reflect the higher weighting for high-school students versus elementary students rather than a dramatic enrollment change (generally speaking, a little larger classes in older, versus younger, grades).
* District 88 spent more than similar-sized school districts in the following areas: regular instruction, vocational instruction, special education, instructional support services (faculty and their development and the development of curricula), pupil support (counselors, nurse, social and psychological services) and transportation.
Some of these costs were outside district control (special education spending depends on the specific student population; and transportation costs depend on geography).
Conversely, the district spent less than similar-sized districts in areas such as: administration, food service and debt service.
A higher proportion of direct spending on students, versus administration or debt service, is lauded by auditors and considered a sign of healthy schools.
(All numbers in this article were rounded.)