1. INDEPENDENT AUDITOR’S REPORT JUNE 30, 2015 ISD #413 Marshall Public Schools HOFFMAN & BROBST, PLLP

2. District Highlights Revenues exceeded expenditures by $700,000 in the governmental funds. Mainly due to increase in general education aid formula along with conscious effort to control costs. Capital lease financing of $1.9 Million for roof project and technology upgrades. $7.938 Million in bonds issued energy conservation measures and indoor air quality improvements. Meritorious Budget Award for the 2015 budget. Certificate of Excellence in Financial Reporting for the FY 2014 Comprehensive Annual Financial Report. GASB Statement No. 68 implemented for June 30, 2015 statements.

3. The District’s Future… Expecting an increase in the formula for general education aid in FY16. School Board authorized additional new Board approved referendum authority in the amount of approximately $32.51 per adjusted pupil unit. This shall be applicable for three years beginning with FY 16. District formed a facilities study committee to review existing facilities and propose ideas for repurposing and/or expanding them due to projected and real continued enrollment growth.

4. District Enrollment Continued good news…the District’s trend shows that enrollment is increasing and is expected to keep increasing in the future!

5. The fund balance in the General Fund increased, as did the District’s available cash balance. The District has not issued Aid Anticipation Certificates since FY12.

6. Largest source of revenue is from the state. Federal revenue sources are a small percentage of income but are the cause of the most compliance requirements.

7. Sources of funding are fairly consistent throughout the years. Higher state funding in 2015 due to significant increase in basic formula and also in enrollment. Decrease in local funding in 2014 due to the state tax shift.

8. Largest use of dollars for any school district is for salaries and benefits.

9. Types of expenditures are fairly consistent throughout the years. Transportation costs are still a large portion of purchased services.

10. Instructional costs (both regular and exceptional) account for the majority of the District’s expenditures.

11. Fund Highlights Food Service Fund fund balance decreased about $25,000 due to increasing costs of food, effort to be more competitive in labor market, and decline in participation of students. Community Service Fund fund balance increased about $43,500 due to additional funding mechanisms for ECFE and school readiness programs. The Building Construction Fund was established in FY 2015 with the June 29, 2015 issuance of three bonds.

12. Fund Highlights Debt Service Fund revenues exceeded expenditures by about $10,000. OPEB Debt Service Fund had a modest increase in fund balance. OPEB Revocable Trust Internal Service Fund received a net $8,500 from earnings on investments and paid the General fund approximately $60,000 for employee benefits.