001Okay, we are ready to go. Aaron, >> great. >> Good morning everyone. Again, my name is Aaron Oberg. I'm the director of finance for the school district. And today we'll be covering first portions of the the monitoring report as we go throughout the entire year. So today is the beginning where we begin to receive monitoring reports from various individuals. Today you'll hear from me as well as from our external auditor who will do an audit kickoff presentation. So those are the two pieces that we'll cover today and I will share my screen and we'll get we'll get started. Each of the for the fact members, each of the items that we are going to be presenting today are saved to the monthly saved to the uh monthly meetings 202526 monthly meetings folder. So uh if
002you if you need to refer back to them etc. We'll we'll be coming to those. For those of you um perhaps listening on the live stream or listening to the recording, the the first pieces that we'll cover today were covered in the board meeting presented to the board meeting in um early August. Bear with me as I share my screen. Great. Uh so the first piece that we're going to cover today, we want to cover the quarterly monitoring report. Clearly we're moni monitoring a report as required by uh statute. Statute requires us to or requires the board to review the financial condition of the district no less than quarterly. And as part of that we provide the quarterly financial statements to the board. And then the board's monitoring policy, the board's superintendent policies also require
003a presentation on the monitoring report. And those also are pieces that we'll go through today. So I'm going to download this so we can go through it outside of um the browser. So this is just the presentation that we give and I think we can get through the presentation part pretty quickly so that we can move uh further into the actual monitoring report and to the financials. As I mentioned, the board is required to review the con financial condition of the district no less than quarterly. And then from the monitoring report for the superintendent, they are reviewing certain pieces of that monitoring report also on a quarterly basis. specifically items related to um the pieces shown here, reserves, cash positions, uh specifically liquidity, our payables, receivables pieces, and then uh any of our borrowing or
004spending on the MLO or bond and then audit and internal controls. So the first piece of course is the constitutional requirement that we have a reserve set aside for TABER in any multi-year obligations. So TABER is 3% of a statute a constitutional definition 3% of fiscal year spending and then our multi-year obligations are the post um postretirement um uh stipens that we provide based on a historical bargaining agreement. And no, no one is is available. No current or not current no additional employees will be added to that piece. So we'll be lowering that reserve as we go through uh time because fewer pe fewer people will be owed that obligation. We're also required then by contracts specifically to have a reserve for the bond redemption proceeds. Those are the the those are the tax collections
005for specifically on the bond mill and then the bond proceeds. So when we issue bonds, then those bond proceeds by contract, we tell both the voters and we tell the bond holders what we're going to spend the money on. And so we're restricted in both of those areas by contract. And the last one is food service. We are restricted by federal regulation that any funds in our food service fund can only be spent on the nonprofit operations of the district's nutritional services department or operations. And so those all of those reserves have been met for the 630 monitoring report. And as you might imagine, those are met every time we do this based on not not only the restrictions that we have in place, but it's it's really what we would do regardless of those
006restrictions. Then we come to assigned fund balance and assigned fund balance is a little bit different. Here we choose very specific items. In many places it is special revenue funds. So we've received special revenue for very specific purpose and we are going to spend those funds on that specific purpose. We also have an opportunity as members of management to then assign certain reserves in addition to those special revenue reserves. and we set aside money for capital projects. This is our capital projects capital reserve fund. Any items that we have um still for grants and we have generally our carryover from year to year on federal grants or on state grants deals with our Medicaid funding. And so in Colorado, the Medicaid funding that a school district receives is not considered federal funds. that's considered state
007funds. We do receive those funds as um I would say partial reimbursement and then we track how we spend those funds throughout the year. Our before and after school enrichment programs, those monies we receive obviously tuition as well as u the state revenue for that program. And so those monies are set aside and captured within their own fund. As well as pupil activities in athletics, specifically anyone who is paying in a fee or an athletic fee, then by statute and by policy, those fees must be spent on the purpose for which they were collected. So it could be for a field trip, it could be for yearbook, it could be for athletics. And then the district chooses then to also set aside a reserve, assign a reserve for risk, IT and instructional materials. And let
008me walk you through the last two first. IT and instructional materials. We do that because of the cyclical nature of those purchases. Obviously, we don't do an instructional curriculum adoption every single year. And so, what we do is ensure that we set aside funds for those future purchases. And what that allows us to do and the same thing in IT because as we begin to do device refreshes, we want to make sure that we have funds set aside which then ensures that we don't have to go back to the general fund and say, "Oh, this year we're going to do a curriculum adoption. Therefore, we need to find $8 million in our general fund." Well, we would have to reduce expenditures somewhere for that $8 million in in order to make the instructional reserve purchase.
009Instead, we ensure that we have those money set aside and we we manage that reserve every year so that it meets our future needs. In that that way we've ensured against those ups and down spending of both IT for IT equipment and for software and then for instructional materials. We do the same thing with our risk reserve. So, as you can imagine, every once in a while, there might be something that is above and beyond the insurance that we carry. And we would not want to go back to the general fund and say cut um cut expenditures so that we can cut the budget so that we can cover this unknown risk expenditure that we now have. You may remember a few years back when we had the floods and anytime we have that 100red-year
010flood, while FEMA did come in, uh many of those expenditures were not covered by FEMA and then even some of the expenditures were not covered by the state. So, as you can imagine, we wouldn't want to go to the general fund and say all of the sudden we have this flood. Let's we need to manage the general fund in that way. Instead, we have an assigned reserve which allows us to protect against the volatility or the potential future volatility of risk. And what I would tell you about risk it and instructional materials is all of those are known risks. We know about them. We know they're going to happen. We don't know the amount. We don't know when. We just know they're going to happen. And so from a fiduciary standpoint, it's it's incumbent upon
011us as management to ensure that we've provided for those uh future risks and those future expenditures. Then uh the last piece is then the unassigned reserve and the statute or the the Gatsby standard literally says funds that are not restricted assigned are then therefore unassigned. We sort of knew that already but they gave us that definition. Uh if it's not these other things it must be this thing and that other thing is unassigned. The board has a policy, a very specific policy that says the unassigned fund balance shall be no less than 4% and no more than 8% of general fund revenues. And that again protects against a volatility of in this case revenue and expenditures. So, if we have an unknown drop in revenue, maybe we have fewer kiddos by the time we get
012to October count or there's something with the residential assessment rate, something like that. We then have a reserve and unassigned uh fund balance. So, not a reserve, but unassigned fund balance, which allows us then to to um protect against that volatility. And really again what it does is protects the general fund. We don't have to go back to the general fund and say, "Oh, we now have this miss. What are we going to do? How are we going to scramble to mitigate that risk?" And instead, we have an unassigned fund balance that does that for us. And so here, >> a quick question. >> Sure. >> Uh I understand the 4% minimum. Why is there a a maximum put on an assigned fund balance? >> So, we don't I don't 100% want to speak for
013the board, but my understanding of their intention is that we want to ensure that we're spending this year's money on this year's kids. And so, in order to do that, what they want to make sure of is that we're not just growing the unassigned reserve every year. And so the state, as you might know, has an unassigned reserve set in statute of 15%. And that's what they that's their minimum number. So in their case, they set a minimum number of 15%. Our district has said, "We want to make sure that we're not growing unassigned. So please make sure we're doing our best to spend those funds every year and not not growing that overall." Does that make does that answer your question, Bob? >> It totally answers my question. Thank you. >> There are districts
014across the state who prefer to have that at zero. And there are districts across the country, in fact, states, specific states that do not allow an unassigned fund balance and any extra state revenue that they have, they must return it to the state. So, that's a little dramatic and Colorado doesn't have that restriction. Uh thankfully. >> So here sorry John Paul. Good morning John Paul. John Paul is with us and he's set to present at 850. Just so >> okay. >> So then we show uh graphically that we're meeting the fund balance uh reserve policy. And of course we were just forecasting the end of 2425 at this point and showing that we had met the 4%. we came in and we'll show at the end of the year through our audit we will show
015a 4.9% um unassigned fund balance. So we will show that we met that policy. The next piece just really quickly now is our liquidity piece. And they want to make sure the board wants to make sure that then uh of our operating funds that we have 30 days of cash in order to meet those liquidity needs. And we certainly do have that. And we show it again uh graphically. As you might know, I'm colorb blind. And so none of these graphs mean absolutely anything to me. I prefer to read it. I prefer to have it in words. But apparently there are people in this world who prefer to see things graphically. Not my thing. Uh but again here we see our average monthly operating expenditures and we show that we do have unrestricted cash to
016cover those operating expenditures. On the payables and receivables side we just ensure that our tax payments are are made timely. Our filings are timely in that we do our best on the receivable collections and most of the receivable collections related to students, student fees, etc. But also on say for example rents and our leases, we want to make sure that we're collecting any receivable money that the district is owed and we report uh compliance in all of those areas. And then of course we have the bonds and the borrowing. And we have LRPAC which is a different committee which assists in tracking bond spending and making bond decisions. But we also have an overlap with fact to make sure they do the same thing. So obviously it's very important to our voters in our community
017to track those expenditures and we do the same thing on um the prior mil levy override. We report compliance and how we're spending that. And as John Paul um from CLA will talk about today, we have um and we monitor audit compliance and internal controls. Now, as we'll talk about, nothing is ever perfect, but we want to make sure that we do have an independent audit. We've set aside a budget for the independent audit. We actually do receive one. And then because we're subject to a single audit because of the amount of federal grants we receive and then any of our other audit compliance measures that generally come directly from CDE most specifically around nutrition. And so those again this year we did have a nutrition this past year we did have a nutrition audit
018from the department of education. And so the board wants to ensure that we are following those pieces and we'll talk about after uh John Paul's presentation again as I said we give to the board a quarterly financial statements which must have by statute a comparison to the prior year a comparison to the budget and then the endofear uh forecast a forecast for the end of the year and we report compliance with that as well. So now I want to turn it over uh to John Paul. So welcome John Paul. And John Paul, do you prefer to share your screen or do you want me to pull up the presentation? >> I can share my screen. I think that'll be easier. >> Great. Can you see that? >> Yes, we have it. Thanks. >> Perfect. All
019right. So, my name is John Paul Levio with Clifton Larson Allen or CLA. Um, happy to be able to kind of uh have the initial kickoff meeting for the financial statement and single audit for fiscal year 2025. Um, we did uh get started on the audit with Aaron a couple weeks ago. So this is kind of the standard meeting that we have to um basically introduce ourselves, kind of talk through the annual scope and our responsibilities. Uh give kind of a brief um glimpse into what the major items that you know I'm sure they're probably things that you're aware of, but just things to keep in mind. Um, and then mainly the point of this is really to make sure that um that the finance and audit committee knows that the audit is going on.
020If there's any concerns or anything that you want to discuss with us, we're available. Would be happy to uh schedule a call or discussion. So that's kind of the uh brief agenda. Um the audit's going to include the annual comprehensive financial report. uh that includes the financial statements as well as some non- audited information that the district uh issues each year. A component of that that goes towards the very end of the document is the single audit uh which as Aaron mentioned is the audit over federal awards and that cycles through uh the most significant federal awards that the district receives on typically like a three-year rotating basis. Um and for fiscal year 2025 that includes the nutrition cluster which is the national school lunch program and the breakfast program as well as the refugee
021and entrant assistance program uh which is the first time that this program has been audited um for the district. Uh this relates to refugees from Ukraine and from Afghanistan primarily um and the federal awards passed uh through the state and um I believe the Rose Foundation if I'm remembering correctly. Um and so that's going to be um a new program that'll be audited uh for the first time this year based on the total dollar amount kind of exceeding that uh threshold for being considered significant this year. All of the federal awards are listed in the schedule of expenditures of federal awards, also called a SIFA. That'll go within again in that same kind of single audit section at the end of the uh annual comprehensive financial report. And then any findings or recommendations that come
022up as part of the audit process would also be included uh basically in the presentation that we'd have at the end of the audit. So, we have a slide kind of outlining uh really kind of the auditing jargon for what we're going to be doing. This basically says that uh we're going to be issuing kind of the same types of audit reports that gives our opinion over the financial statements and those federal awards. Um this is kind of the slide that I'd like to maybe spend a minute talking about um more on our responsibilities that um so our audit doesn't relieve the district's management of their responsibilities. The way I like to describe the audit is that the district is really the author of the financial statements and we're the editor uh making sure that
023everything presented in there is accurate, that everything is disclosed as it needs to be. Um we do review internal controls but we don't issue uh an opinion specifically over the effectiveness of internal controls. So we really just kind of look at that as an overall structure or framework to make sure that uh that's reasonable for the correct uh presentation of the financial statements. Uh we do design our audit procedures for reasonable but not absolute assurance. So that means we're not looking at every single individual transaction that happened during the year. Instead, we're looking at again those internal controls. We're looking at a sample of transactions, the larger transactions, um other types of uh comparisons with uh previous years and other types of analytics to make sure that um the amounts that are presented uh look
024accurate. And then uh we do consider the material impact that fraud risks could have, but our audit is not specifically designed to be detecting fraud. Um, and so that's kind of a common misconception, which is why we have a bullet point in here, is that um, you know, it if if we had any concerns or if we found something that was indicative of fraud, that is something that we would bring to the board's attention as well as to the finance and audit committee's attention. Uh, but we're not specifically designing most of our procedures to be uh, looking uh, for fraud. couple of um significant kind of changes or uh new items for fiscal year 2025. Um there is a new GASBY standard. So Gazsby is the governmental accounting standards board. Uh Gazsby is responsible for
025basically issuing what the uh generally accepted uh accounting principles would be for uh governments. There's a new standard relating to compensated absences that's effective for fiscal year 2025. Compensated absences would refer to uh any time of uh type of paid leave such as sick, vacation, PTO, um any sbatical if that's um actually paid uh time off uh those types of things. Um, previously the guidance was that anything that was paid out would be acred for uh basically at the percentage that it's going to be paid out. The new guidance uh includes more of a consideration of unpaid time that's going to be used as time off. So previously it was only if it was actually paid out. So, for example, if someone um retires and has 100 hours of vacation time and that gets paid
026out um you know at a sub rate or at their pay rate um then that would be previously that would have been included. That's still included but now it would also include if that 100 hours is not paid out. it would still be acred for at the dollar amount uh for estimating how much of that time someone is going to actually use as uh unpaid time or sorry as a paid uh time off in the future. So maybe a little confusing. What I'll say is that it does not impact the actual financial responsibilities of the district. It doesn't change um how employees are paid, what they're paid. It only um changes the long-term liability relating to um compensated absences that's presented on the financial statements. Um and that is only effective on the long-term statement.
027So that doesn't include um anything that would be compared against the budget. Um so I think that's also important to keep in mind. Uh the other thing is that there was a debt issuance uh in fiscal year 2025. I'm sure everyone's well aware of that. That was for 186 million including the premium um that was uh included along with the debt. >> John Paul Bob question. It may be more for Aaron than for you. >> U do we have an estimate of how much that liability is going to go up because of Gazsby 101? I don't have it right now, but that's something we're working on. >> You know, once I have a number, Bob, I can I can send it to the committee. >> Okay. Thank you. I personally, I think it's a dumb
028standard, but uh you have to follow it. So, >> could not conceivably agree more. >> Yeah. Unfortunately, this is one where I think they kind of outthought themselves on um the liability. I think showing it at what was paid out probably makes a lot more sense. I think in their minds this is more of matching the cost with um you know when that cost was incurred. So someone earns that time off during a period to show it at that point rather than when they take the time off. But especially with salaried employees, it's not like um you know, you're actually paying out more or paying for someone to cover that or in the case of the district with teachers, you already have subs that are, you know, already part of kind of the process for
029that. So how effective this is at actually improving the accuracy. I kind of agree that I'm I this is not the direction that I would go but it is uh again one of the required standards. I do think that the math for this is kind of easy in terms of taking the total number of hours multiplied by the pay rate multiplied by the percentage that's estimated that it'll be time off in the future. So mathematically it's relatively easy to calculate, but coming up with a good number for that percentage um is actually a lot more difficult than what I kind of initially thought it would be. Um there's a lot more kind of factors that make using historical information more difficult to still come with a good estimated number. Um, so something we'll we'll be
030working through with Aaron, but again, just wanted to point that out since you will potentially be seeing a change in uh the balance for that. The other uh topic, and this is something that we kind of cover every year um during this presentation, just to give you a little bit of a heads up of what you should expect to see on the financial statements. Um so there is a net pension liability and a net op liability. Uh, OPEDB stands for other post-employment benefits. Um, both of these relate to the district's required participation in Colorado PARA. Um, this number is something that PAR and PAR's actuaries determine each year. They provide this information and then the district is required to present the percentage of PAR that you know contributionwise the district relates to. Uh and so
031as part of that, there's a net pension liability expected uh for fiscal year 2025 of 730 million. And that's down from uh 809 million. Um there is within um governmental accounting standards a way that all of these changes each year because this is not uncommon for this to have a very significant swing each year. And you know, next year wouldn't surprise me if it swung back the other way. just based on the actuarial data and you know the assumptions that they're using. Uh so this does fluctuate but there is a uh written into the standards a way that this is smoothed out over uh the years rather than taking you know the entire 80ish million dollar as a impact to revenue or expenses this year. Um that is smoothed out over a number of years.
032And so at this point, we're expecting about $5 million to actually hit the income statement. Again, this is really only on the full acral uh long-term basis. So, this doesn't impact the budget schedules or the uh comparison with the budget. The net op liability is tiny in comparison. an estimated liability for fiscal year 2025 is of 13 million. But because you don't normally hear uh the words OPED or post-employment benefits uh discussed mainly just bringing up the fact that this is part of PAR. So when you see a whole bunch of pages with disclosures about it in the financial statements, that's what it relates to. Uh in terms of the fieldwork timing, uh we already completed our interim procedures over the summer and we did start our final fieldwork again a couple of weeks ago
033with the anticipated uh issuance uh date for the end of October. So really kind of starting to work on wrapping up our audit procedures and moving into the review phase uh to make sure everything is uh able to be completed by the end of October. And then I think we have the audit committee meeting scheduled for November. Uh but we'll make sure that that's on the calendar for when it makes sense uh to meet. And then as I mentioned at the beginning of the presentation, really the main purpose of this meeting is to make sure that um the finance and audit committee is aware that the audit is starting and if there's any questions, concerns, anything that makes sense to discuss so uh that you're aware that we're available and happy to have any discussions
034uh that make sense to have. So really with that uh that's the end of kind of my presentation. And I'll pause if there's any questions, comments, or anything else to discuss. >> I just want to say thank you, uh, John Paul. That was very informative and, uh, told Jean I said hi. >> Sounds good. Your reputation precedes you. So, I appreciate I was I spent hours last night studying all kinds of things to make sure uh, you know, I'd be ready for any questions for you. So, >> I hope not. >> No, that's not true. John Paul, can you just touch on on the potential risk related to the OM compliance supplement? And then and then I guess I have a different question related to that, whether or not the basic financial statements can be
035issued at a different time than the single audit. If you can touch maybe touch on that and let the committee know about this potential risk. Yeah, great point, Erin. Uh, thanks for bringing this up. So, um, the as part of the single audit, um, the federal government issued what's referred to as the, uh, compliance supplement. This is, um, done through the office of management and budget or the OM. every year they issue this compliance supplement that's I think a thousand some pages um that has all of the guidance for almost every federal program of how they want auditors to audit those programs. So basically we take that plus kind of our own um procedures and our understanding of the program and that's how we uh go through the single audit that normally is issued around
036May each year. Um, unfortunately for this year, it is the end of September and it still has not been issued for uh 2025. And basically, we can't issue our single audit until um we until that's been issued and the federal government says this is what we want you to do. They have issued a draft of what they expect this to be, but it's not final. So, we essentially can't issue the single audit until that comes out. And even once it comes out, we'll probably need a couple weeks to make sure there's nothing wonky that they put in there that's going to throw things off or require us to do anything additional or kind of change our audit approach. Um, so at this point with what we mentioned about trying to have everything finalized and issued
037by the end of October, that really means that the federal government needs to issue that within the next, you know, really two weeks or so in order to not delay the district's planned issuance of the financial statements. Um, in the past, the district has always presented the annual comprehensive financial report and the single audit together in one document, and that's been kind of the preferred um presentation. Um, but that's not required. So, the district could elect to issue the single audit separate uh from the financial statements. So, if we um in the next couple of weeks see that, hey, the federal government still hasn't issued this document, um we're still waiting on that, but we don't want to delay the financial statements. Uh we could uh issue the financial statements separate, kind of pull out
038that single audit piece and issue a separate uh report for the single audit. it'll change a little bit of the wording and you know outlines and whatnot, but overall it isn't a drastic change uh to the statement. So that is an option for the district if the federal government continues to delay this issuance. >> This seems to be a recurring problem. This isn't the first time that they missed their deadline. >> Uh that does happen in my opinion. It does seem to be somewhat related to changes in administration. Uh though the last time they were significantly delayed was around kind of the COVID timing and so there was a lot of additional federal funding um coming through and changes in requirements. So it hasn't happened the last couple of years, but you're correct that this
039is certainly not the first time that this has happened. Um, and I think 2020, if I'm remembering right, I think they issu they released it in December. So, it's not even the latest that it's been in the last few years, but they have been saying since June that it's it coming soon. Um, and so I don't know what they define as soon, but I it seems like, you know, I'm not sure I believe when they say soon considering, you know, three months later it's still not out. So, As John Paul mentioned, the district's preference, my preference specifically, which of course is the only one that matters, is that uh we issue them together. I think there's a lot of wording in the opinion letter itself in in the first opinion letter that talks or at
040least references once or twice the single audit and then of course the single audit itself would incorporate or talk about how the audit the basic financial statements audit impacted um the single audit. So there's some things to me at least that there's areas where they they really do kind of overlap in thought process where it it's easier for me to think about it that way. So um you know we we we really do hope that we don't have to issue them separately or ask to have them issued separately but uh that is hopefully the last the last potential option. Um, the last thing I I just want to mention as as John Paul is on is we do spend quite a bit of time at the district office as it relates to financial statements. When
041we talk about materiality and so materiality um in accounting, all accountants want to tie to the penny. Like if you're if you're reconciling your checkbook, you probably want to or most people probably want to tie it to the penny. I've seen some people be like, I'm close enough on their bank reconciliation. I'm close enough. But cash is generally one of those things that you probably just want to tie to the penny. What I would say is that the rest of it and there's a very specific note in the financial statements that I'll talk about when when we get closer is that the the presentation again is owned by management and to the extent that we have made assumptions or we've made uh estimates related to materiality we will disclose those. But again, the the overall
042piece is that these financial statements are not going to be perfect. Otherwise, we would never issue the financial statements. We would never issue them. And so there is risk and why we have um John Paul and we why we have CLA looking at this is because they want to make sure that it is free from material misstatement and the district does not have a significant deficiency in our financial reporting or in our internal controls. So nothing is ever perfect. Um, we also try to make sure that we get these things issued otherwise we would never do it if we wanted to just be perfect. And so there is some level of estimate and and the overall standard for me is that and how I define kind of relative materiality is would it make a difference
043to a bond holder on whether or not they would make an investment in the district. If if the financial statements said something different, would they have made a different decision? And if that is not true, then my level of of concern about a potential for um not an accounting problem because accounting problems are different, internal controls are different, but whether or not we get something in next year or last year, I didn't want to spend a lot of time worrying about that because financial statements for school district end June 30th. What is going on in June and July? It is the most significant work that we do around capital is the most significant work that we do around um uh pieces within the buildings. And so it can get very difficult to get all of
044those invoices from all of our contractors and then have a determination as to what actually happened on June 30th at 11:59 p.m. versus what happened on July 1st at 12:01 a.m. And just that it causes so could cause so much work. And as an attorney, I always think yes, we bill to um six-minute increments. Uh so we want to be very precise in our billings, but when it comes to the end of the year and the start of the new year, there's just a level of of materiality and really just time in the district's time that it would take to issue those financial statements that just become uh the the return on sort of that investment of time becomes smaller and smaller. So, you know, and that's why I have John Paul because John Paul
045can check my assumptions and agree with me or disagree and then we can kind of come to a consensus on where we are on certain matters of of materiality. Um, but that is always important to me, especially around a school district audit. Um, and I don't know if you want to add anything to that, John Paul, if I misstated something. No, I think that is a a good point to make. I think your comment about a lot of the misstatements or things that we uh would find in an audit relate to when something is recorded. So, as you mentioned, does it relate to fiscal year 2025, fiscal year 2026, fiscal year 2024? And you know, depending on when the vendor did that work, when they build for it, um that can be where questions come
046up. The other area as you mentioned would be estimates. And so like we talked about with compensated absences. We have no idea how much sick time, you know, teachers are going to take uh next year or over the next 10 years. And so it's kind of the best guess of what that's going to be. Um but who knows what that's how much how accurate that's actually going to be. Um in terms of reconciling a checkbook to a penny, I'm not sure what a checkbook is. I think that's the thing I pull out like three times a year. So, I don't know why that would be so hard to reconcile, but u you know, neither here nor there on that. >> The good old days done that. Couldn't agree with you more. But >> and and
047I one of the reasons I bring that up is next year we'll we'll be pretty far into some very significant work around Thornton High School. And there's going to be a lot of work around Thornton High School that that happens in 2526 versus 2627. and we'll do our best to work with our large contractors to get those billings to us in a timely manner so that we can figure out which which side of which uh is on. But the last one of our last billings that we received uh was a billing dated July 15th and it was the invoice is dated work between June 15th and July 15th. Well, I wasn't on the work site, so I don't know exactly how much work was done on this side of the fiscal year versus that side
048of the fiscal year. Um, but I think that we'll do our best to make some estimates around uh percentage of work completed, especially when we start um our two largest projects, the nutrition services center and Thordon High School. those the very large projects. >> Great. >> Uh thank you so much John Paul. I appreciate um seeing you even remotely. So great and uh I'm sure we will talk again very soon. >> Sounds great. Thank you everyone. >> Thank you. In just the few minutes that we have uh we have left, I want to now uh cycle back to uh what we were talking about earlier and uh the pieces that relate to what we share um with the board. And the first piece again is the specific monitoring report. And what I would tell you
049is that it's 17 pages long. And when we do the overall presentation, um, we pull out the most material items to share with the board. But of course, and Chris does issue an entire, uh, piece that you're more than welcome to read all the way through. Um, but, um, I think, uh, what hap um, this does not like whatever button I pushed. Um I think uh what this does is and the reason why one of the reasons why it's long is then it talks about the policy and then it gives the superintendent's interpretation of that policy and then walks through why we believe in here is the um here is the proof that we met uh that overall standard. So, uh, you'll see more specific detail and references to all of those pieces that we
050covered. And for example, around the Taber Reserve, we do show that also our charters follow the Taber Reserve and their contract reserves. Their contract is with us and their reserve is related to special education. And the reason that we mentioned Taber Reserve for the charters is that um there's an opinion that if the charter does not um issue financial statements showing a Taber reserve, the district would have to ensure that our Taber reserve cover the charters. So it's very important for us to be monitoring the charters and ensure that they have a table reserve because that uh could duty could come back on the district. And so again these pieces around uh this is specifically I'm going to put this in one page otherwise um you'll go nuts as I uh go through it. Again,
051this was just the chart on the fund balance for uh unassigned fund balance. Then we talk on the next uh piece about uh cash flows and the cash um reserves which is similar to the presentation. And then um the next piece is ensuring that our budget is we are not in any way uh putting the district at financial jeopardy by overspending expenditures over over uh revenues in any uh certain way. What you'll see is that we did show in certain funds, the bond redemption fund, the general fund, uh food service, uh base and pupil activity, as well as other special revenue that we did spend down the fund balances, but all of those are planned spendowns of fund balance. They're not um anything that we didn't tell the board or that the board didn't adopt
052when they adopted the financial statements. What I would also say is that these are pre- audited numbers and so uh we issue them as of pretty much as of July 2nd and there's a lot of accounting that happens uh after July 2nd uh related to the fiscal year. The next piece uh again we covered penalties in the in and compliance with issuances of of federal reports and then our receivables. You'll see in here that we do have uh receivables approximately a million and a half and then we do have uh I would say a lot of that is related to inactive students account balances. And so, um, what I would say overall is that those are a combination of multi-year, uh, inactive student balances. So, that there's quite a lot of years that are totaled
053there, but we do obviously we're still running operations and our student fees and and athletics. So it is not um a concern of the superintendent or the board other than what we continue to do which is to ensure that kiddos who are required to pay the fees are are paying them in a timely manner. The next piece is just the bonds and and again we have LRPAC who's really tracking that as John Paul talked about. We did issue bonds and then we issued bonds with a premium so that our overall bond issuance was approximately $185 million. But of that 171 was PAR. So we've got more par available to issue in the future related to the 830 million authorized. Uh so that has happened and we are generating interest on those bond proceeds. We also
054uh put in here that we did do the first um distribution to all of our charters. So the charters share equally on a per pupil basis uh with the bond proceeds and we send those to uh to the individual charters. Uh we show the specific projects u that have been budgeted and what we've spent year to date and then what we also have encumbered working with our specific vendors. And again, we show this and we monitor this quite often with with our LR pack. We have uh two bonds. We have a bond steering committee, a bond leadership meeting every week where we cover this and cover any potential uh either overspends or desires to move budgets around. So, all of this is in here and as you can see, we've already spent uh you know,
055we have we budgeted to start in one year of spending down uh Thornton by about 23 million and we're we're more than halfway through that spending for Thornton High School. Um the next piece is just really the and this is a goofy presentation. I don't know what this is for sure. Uh but um um we can show that site. I want to show that slide in a different year. But then this one uh just really says how do we spend our bond proceeds and we're spending those per our mil levby proceeds on what we said we would and uh showing compliance with with that piece. um multi-year expenditures as I said we have a a specific um reserve for that and then uh no we're not committing expenditures or you know revenues based on uh
056uh based on assumptions that are not you know have any basis in reality and of course we we go through and we're very specific on our estimates of what will happen in future years around pupil count. And here again, we're just in our sixth year of declining enrollment, which of course we plan for and we plan for that decrease in um in state aid. Of course, we are always monitoring our borrowing levels. And what this specific piece says is that the superintendent cannot issue any U borrowing without board approval. And we issued while we issued the bonds as you know the board u put the issuance on the ballot uh the ballot passed and then subsequent to the passage of the bond um measure. They then authorized the issuances then authorized both the superintendent and
057the chief financial officer with the power to then further issue those bonds which we did in January. Um which is a lot of fun um and a lot of time in my life issuing bonds. Um then again we talked about the annual audit and you heard from John Paul today and um what and then we're not committing any uh reason we're not joining any sort of um lawsuits or litigation that the board doesn't know about as a as an additional party. And then uh what we have here in number 12 and just a quick minute on this one is that once we do finish this year's audit, we will be issuing a um a an RFP. Uh we're due for an RFP on our audit after this year. And so we'll be uh going through
058that. We'll be asking for a couple volunteers from the committee and a couple volunteers from the board in reviewing our responses to the RFP because you are the committee that represents the board and then overall the auditor works for the board. They don't work for me. Um so uh we want to make sure that the people who uh the auditors report to are the ones who are actually uh assisting in in choosing the auditors and reviewing those proposals. Uh talks about uh auditor standards. Again John Paul covered auditing standards. um we are um a prudent investment standard which again we're just ensuring I think that we're as fiduciaries of public funds we're ensuring that we're maximizing the returns on those funds without um risking those funds. So we have limits by state statute on what
059we can invest in and what we can't invest in. and you'll get a very specific presentation on our investment strategy from our external um financial advisors in a subsequent meeting. Uh this is just a layout of of what we do invest in and we follow that that policy. Uh and I think those are the biggest ones that relate specifically to to kind of financial pieces. And then as I mentioned we also show the board in this case these would be pre- audited numbers for each of our funds. So the general funds overall then the specific general fund our instructional fund as I mentioned u for instructional resources our IT fund and our risk fund and all three of those funds are part of the general fund. We know that we are again on the bond
060redemption fund. We show our property tax collections that that we have as well as the payment only of principal and interest on the bonds as well as bond costs. Those are the only allowable expenditures out of the bond fund. And so we bond redemption funds. So we make sure that we're showing that that is all we're spending those funds on our capital projects. This is specifically our building fund which as you can see is where the $185 million of issuances went. Uh and then this will show the spendown of that issuance as we go forward throughout uh this upcoming year. Specifically the capital projects. This is our reserve capital projects reserve fund. And then uh we also have our grants fund. And what we show here specifically is that you can see last year we
061at this time we showed that we had $47.5 million of of grants. And you can see the majority of that was federal grants. significantly smaller this year than in the prior year, which is what we expect because there are fewer federal programs issuing us funds um as the CO and other programs have now uh sunseted. We also again as we talked about food service all monies that come into the food service account mostly uh state and federal monies because we're on universal free lunch where you can see we have very little charges for services very few people paying for lunch and this would mostly be um students who are paying for an extra meal or allocart meals or an adult meal. So very small overall in nonstate or federal monies and all of those funds
062you can see projected to end with a fund balance of 12.7 million. Talked about our base program both tuition and federal um or not federal state uh CCAP uh uh funds. So all of those are are capped in the base program and they are projected to have a $4.4 million ending fund balance. Pupil activities which again our student fees um we collect $4 million and expend about $4 million and then end with about a $4 million fund balance. So projected again to be quite liquid in our our pupil activity funds similar to our athletic funds projected to end with a fund balance just south of of $2 million. But all collections related to um either rentals of the fields for example or pupil activities, gate revenue, concessions, etc. that are related to athletics or athletic
063fees all go here. And then the costs uh to run the program. Other special revenue is just what it's called. It's just other revenue. This comes in with some private gifts, private grants, uh some other pupil activities that are again special revenue funds. So the expenditures are tracked to match those uh pieces. So, that is where we are and we're about 7 minutes over, but I do want to make sure I'm I'm stopping if anybody had any uh specific questions before we stop this and and go on to the stop the public side of this meeting. Okay, great. So that ends u the public side of the fact meeting for today and the fact will now adjourn and and begin working on It's