Centralia School District 2013-14 Unaudited Actuals Board of Trustees Meeting September 23, 2014

Background The District is required by law to close its financial books for 2013-14 by September 15, 2014. After closing the financial books, the financial statements must be sent to the Orange County Department of Education (OCDE) for review. After reviewed, OCDE forwards the financial statements to the California Department of Education.

Background Individual financial reports are prepared for all of the District’s funds. The financial reports present the 2013-14 revenues, expenses, assets, liabilities and fund balances. The 2014-15 Budget has NOT been updated. The 2014-15 Budget will be updated with the First Interim Report in December 2014.

General Fund Financial Report The General Fund consists of two types of funding: Unrestricted – resources allocated to the District and spent at the discretion of the District; and Restricted – resources allocated to the District with specific expenditure restrictions. The combination of the unrestricted and restricted resources is called the Combined General Fund.

Unrestricted General Fund – Revenues Unrestricted revenues were approximately $162,100 higher than estimated actuals. The primary factors for this increase was due to the following: There was a decrease in the final P2 ADA, which is used to calculate the majority of the District’s funding. There was an increase in the Unrestricted Lottery funding received. There was an additional increase in a rebate received for the E-Rate program.

Restricted General Fund – Revenues Restricted revenues were approximately $89,200 higher than estimated actuals. The primary factors for this increase was due to the following: Unspent federal revenues were deferred. This decreases 2013-14 revenues and will increase 2014-15 revenues. There was an increase in the Restricted Lottery funding received. The District received a rebate for health & welfare insurance.

Combined General Fund – Revenues The net change in Combined General Fund total revenues from the Estimated Actuals is an increase of $251,383 (or 0.69%). $36,039,973 Estimated Actuals $36,291,356 Unaudited Actuals $251,383 Variance

General Fund – Expenditures Unrestricted expenditures were approximately $724,890 higher than estimated actuals. This increase was the result of accounting changes required by LCFF, as well as increases in health and welfare costs. Restricted expenditures were approximately $433,553 higher than estimated actuals. This increase was the result of accounting changes required by LCFF, higher health and welfare costs, and increase in transportation and special education programs.

Combined General Fund – Expenditures The net change in Combined General Fund total expenditures from the Estimated Actuals is an increase of $1,158,443 (or 3.24%). $35,706,956 Estimated Actuals $36,865,399 Unaudited Actuals $1,158,443 Variance

Combined General Fund – Fund Balance Description 2013-14 Unaudited Actuals Beginning Fund Balance – July 1, 2013 $9,339,058 + 2013-14 Net Change in Fund Balance (1,678,892) Ending Fund Balance – June 30, 2014 $8,765,011 Revolving Cash & Inventory $86,967 Restricted 2,040,417 Assigned 415,562 Minimum Reserve 1,105,963 Unassigned 5,116,102

General Fund – Reserves The District finished 2012-13 with a combined General Fund reserve of $7.9 million (or 22.9%). The Combined Reserve is comprised of the Reserve for Economic Uncertainties and the Unassigned Fund Balance. The District finished 2013-14 with a combined General Fund reserve of $6.2 million (or 16.9%). This represents a $1.7 million decrease from the 2012-13 Combined General Fund reserve.

Impact on 2014-15 While the District finished 2013-14 with a reserve higher than the statutory minimum reserve, the District must be mindful of its pattern of deficit spending. In the last two fiscal years (2012-13 and 2013-14), the District’s combined General Fund reserves have decreased more than $2.3 million.

To maintain our fiscal health … The District must carefully monitor the budget and cash flow on a regular basis. The District must maintain our pattern of judicious spending in an effort to maximize resources available for instruction. The District must improve the student attendance rate. The District must closely monitor its Contributions for Restricted Programs.

Questions?