Audit report shows federal stimulus helped Florida school districts
A new report from the Florida Auditor General suggests that the influx of federal stimulus money helped Florida school districts rebound from dire financial conditions that left them with little room for emergencies or other funding fluctuations.
The Report on Significant Financial Trends and Findings in 2011-12 Fiscal Year Audits of District School Boards (to be posted here soon) shows that the number of districts with fund balances below 3 percent -- the amount considered acceptable to deal with unexpected contingencies -- dropped from 13 in 2007-08 to one in 2010-11, then rose back to three in 2011-12. The federal stimulus ended in 2010-11.
Manatee County had an insufficient balance for five consecutive years. The others under 3 percent were tiny Franklin and Columbia. On average, districts had a "financial condition ratio" (general fund balance to revenue) of 12.24 percent.
The report states:
"As previously discussed, the 2009-10 and 2010-11 fiscal year financial condition ratios were significantly impacted by the receipt and use of ARRA and other Federal economic stimulus funding, most of which terminated during the 2010-11 fiscal year. Further analyses of school district financial trend data identified other factors that impact the financial condition of school districts and may increase the risk of weak financial condition. While no single factor is identified as a guaranteed predictor of financial condition, factors such as declining property values, increasing or declining enrollment, and school and class sizes require the exercise of effective financial management to limit the impact on the school districts’ financial condition."
In this discussion, the report notes the states fastest growing and shrinking districts over the time period. Among those, Pinellas had the biggest enrollment drop (-4,617), while Hillsborough was the thrid-fastest growing (+4,779), behind Orange and Palm Beach counties.
The AG report noted that variations in student enrollment can make planning difficult for school districts. It further cautioned districts to plan effectively even as it appears that the state is increasing some funding:
"While these are relatively significant increases compared to recent years, effective financial monitoring and timely and appropriate adjustments to operations are critical to school districts to ensure that the costs of operations remain within available financial resources."