07/07/2014 – Monthly Financial Report

May 2014 Financial Report

Dr. Michael Bell (Chief Financial Officer) – It’s the 2nd to last month of the fiscal year.  The trends in this part of the year continue.  We are working off an operating surplus and are spending more than we take in monthly.
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This time last year we had collected $665.5M and this year we have collected $732.3M thus far.  We have expended $681M thus far.  This time last year we had expended $667M.  There’s a professional learning day adjustment that is not on the revenue side yet, so expenditures are overstated by about $3M.  We will be reimbursed with RT3 funds.
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We are way ahead of expected collections due to local revenues and tracking behind on state revenues.
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The operating budget left over at the end of the year will be the fund balance.
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We are confident that we will end up with a $20M dollar fund balance after calculating accruals through the end of the Summer.  We go through the accounting adjustment in July and August before we know the specifics.
Thad Mayfield – If you straight line instructional salaries we will be $14M under the budgeted amount.
Bell – Yes.  We will be $8M or so under.
Thad Mayfield – Why?
Bell – I don’t know.
John Coleman – When will we have final estimate on revenues and costs?
Bell – We go through a refinement of the prior year activity in July and August.  One of the biggest variables is the flow through of appropriations payable.  Last year we set aside $7M dollars for appropriations payable.  It actually came in at $5.3M.  We did the same thing this year.  The appropriations payable is the refinement of the purchasing process that seem to take most of the time.  We should have a better idea in August.
The state auditors just finished their FY2013 audit.  You’ll be getting that report soon.  It will say that we were substantially positive in the general fund.  That’s a broader fund than the general operating budget.
Coleman – It looks like we are coming under budget in a variety of areas.  Do we have any way of ensuring people don’t spend up to their budget?
Bell – We’ve started a quarterly review with division heads.
Luckily the economy is rebuilding.  The tax digest is robust.  The tax accessors this time had 12,000 appeals.  They are at 3,200 right now.  At this rate we should build up to the minimum fund balance of $60M in a few years.