By Selwyn Harris
In the midst of a slowly recovering economy, the Nye County School District NCSD received a clean audit for the school year ending June 30, 2012, but the district also is in jeopardy of losing more money next year.
Dan McArthur, a certified public accountant, presented his findings to the board of trustees on Tuesday evening.
“As part of obtaining reasonable assurance about whether the district’s financial statements are free of material misstatement, I performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts.
“However, providing an opinion on compliance with those provisions was not an objective of my audit, and accordingly, I do not express such an opinion. The results of my tests disclosed no instances of noncompliance or other matters that are required to be reported under government auditing standards,” McArthur said.
NCSD Chief Operating Officer Ray Ritchie said news of the declaration seems promising.
“The good news is we didn’t have any write ups and we didn’t have any violations. We are in control and Mr. McArthur believes our internal controls are sufficient. It was a clean audit. Our ending fund balance in the general fund shows we have a little more money than we anticipated. We budgeted to start this new year with $2.5 million as a beginning fund balance and we have an additional $1.7 million as he pointed out,” he said.
On the other side of the coin, Ritchie said the district may be deprived of some funding due to a drop in enrollment throughout Nye County and other factors.
The decline means the district could lose more than $1.2 million from Nevada’s Distributive School Account DSA allocation, which typically pays out more than $6,500 per student.
In October, district officials reported the student count dropped districtwide by 118 students. That number has grown since then as an additional 84 students have left the district, bringing the deficit over last year to 202.
“We have a drop in student enrollment this year of over 200 kids, so most of that will get consumed next year; trying to cover the shortfall in the revenue. I do realize this is a legislative session and that’s based on the DSA number. If we were using the DSA number that we were given for this year, we would have that shortfall.
“Because it is a legislative session, we won’t know until the end of June what the DSA for the next year will be, but based on the number that we know today, we would be facing a shortfall and that extra revenue would help cover that shortfall,” he said.
McArthur pointed out that the audit also showed that property tax revenues have also declined from $10 million last year to more than $7 million this year.
Ritchie noted that only time will tell when the district will take another financial hit. Preliminary numbers for projected property tax revenues to the district are due Feb. 15. Final property tax estimates will be due to the state on March 15.
“When we are putting the budget together, it’s always fun to put a budget together in a legislative session because you will know your property tax, you will know your local school support tax, but you won’t know your DSA until the legislative session closes. If they continue to behave as they have in the past, they always leave it till the last minute to approve that,” he said.
Another funding mechanism for the district is known as the Secure Rural Schools SRS program, which was established by the federal government’s Community Self-Determination Act of 2000.
The program is expected to “sunset” in 2014, but Ritchie said there is some hope that it may continue beyond that point.
“The SRS money of $800,000 was approved for five years. This was the last year to receive that money, meaning the 2011-12 school year. It has some criteria and the governor needed to sign it, I believe by September 30 and then the feds need to do whatever they need to do. That money will go to the county and then the county will remit it to us,” he said.
The net assets of the Nye County School District did increase during the fiscal year 2012, from $70,896,559 to $76,044,317, creating a difference of $5,147,758.
With aging campuses in both northern and southern Nye County, the need to improve and upgrade the schools remains critical.
The projected 2012 budget for improvements was estimated to run $24,583,534; however, the actual total costs proved to be much less and amounted to $19,616,965.
Ritchie pointed to at least two capital projects in Pahrump that were completed within the past few years.
“It’s a timing issue. We built Manse Elementary School and we moved into Pahrump Valley High phase II and III. We did the parking lot and we renovated the old building,” he said.
Though overall, the audit revealed no irregularities in the district’s money management, a few schools to the north were scrutinized following the audit over late deposits.
Ritchie noted that it was due to their remote location.
“We realize here in Pahrump, we have like three of four banks here in town. We bank with Bank of America, which is the bank that the school district uses and we have one here. In some of the northern Nye County communities, they don’t have a Bank of America. There’s no Bank of America in Gabbs so they either have to drive an hour and a half back to Tonopah to make a deposit, or they have to drive to Hawthorne to make a deposit and it’s the same thing in Round Mountain.
“We ask that they do it at least twice a month. The collections there are maybe not as significant but it’s still money sitting in a school that if someone broke into they could get it. We ask that they deposit their money just like any other business in a timely manner. Overall, a good effort was made by all of the secretaries and the principals in managing that money that was generated through fundraisers and other things,” he said.