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Albert Lea school board members accepted the 2021-22 district audit report Monday night after they saw a presentation from a certified public accountant.

Greg Larson of Feldman & Company, said the company issued the district a “clean” report. A clean report means the district followed financial rules and that every financial statement was materially correct.

There was one finding in the internal control report.

“Basically says we helped you write up the audit report, which is pretty common for a lot of school districts in the state of Minnesota, probably 95% of the districts,” Larson said.

Jennifer Walsh, executive director of finance and operations for the district, said every year districts are required to have an independent, annual audit.
The report also listed some financial trends in the district.

The district’s general fund total balance increased from $6.536 million in 2021 to $8.074 million in 2022. The unrestricted fund balance, which according to Walsh was where most of the district’s daily operating expenses come from, increased from $6.159 million to $6.985 million.

The fund balance is also 1% higher than what the board assigned as a 12% fund balance.

“The district is in very sound financial condition, thanks in large part to our taxpayers who approved the renewal of our operating referendum,” Walsh said. “We certainly have been the recipient of some of the federal COVID funds that have helped us provide some extra support for our students as they have navigated this unusual time.”

Of note, the district’s food service fund balance increased from about $284,000 in 2020 to about $487,000 in 2021 to about $694,000 in 2022.
“You can see how the fund balance has improved over the last two years,” Larson said. “It’s a five-letter word called COVID. The prior year everybody received free and reduced meals, and the funding for those free and reduced meals is a lot higher than a student paid meal at a regular price.”

Another reason the fund balance increased was the increased cost of food.

Walsh said that allowed the district to purchase new equipment for the kitchens.

The Community Service fund balance fell from about $534,000 in 2021 to about $414,000 in 2022.

“Looking at the budget, that was a planned drop,” Larson said. According to Walsh, the district used the funds to build the outdoor classroom behind Brookside Education Center.

The Debt Service fund balance increased from about $987,000 in 2021 to $1.368 million in 2022.

In total, for 2022 the district received over 77% of its revenue from state sources, almost 11% from local property taxes, over 9% from federal sources and almost 3% from other sources.

Walsh said the district ended the 2021-22 school year with a 13% fund balance.

“I’m really proud of the work that the board and my staff and everyone’s done to keep our district in an extremely healthy financial position,” she said.
“We want to have a fiscally healthy district, but we also want to ensure our students have, and our families have, the very best opportunity and experience,” said Superintendent Ron Wagner. “Finding that balance as we move forward to look at our investments, align our investments and measure the … return on that, those investments, I think that’s a priority moving forward.”

“The fund balance is not a measure of extravagance or frugality,” Board Chairman Neal Skaar said. “It’s a number that reflects what we have decided we comfortably should have on hand in order to meet our expenses.”

Walsh noted the district spent more per pupil than comparable districts and the state average.

“It’s important to remember we have a unique demographic in our district,” Walsh said. “We have 62% of our students qualify for free meals. That generates sizable amount of what’s called compensatory revenue that we use to address the unique needs of these students. Many districts are not in that situation.”

The district also has a large English learner population, whose students generate extra revenue.

In other action the board:
• Approved a resolution that combined polling places for multiple precincts and designated hours during which polling places will remain open for voting for school district elections not held on the statewide election day for 2023.
• Under consent items, Paw Sher, Paw Hser, Gabriel Twaddle, Jamie Swanson, KC Jones, Sheryl Jones, Katy Hodge and Kyle Milliron were all hired in a variety of roles, while the board accepted the retirement of Barbara Anderson and resignation of Jayna Edwards. Danielle Wear, a paraeducator at the high school, was terminated.
• The board recognized current members Dennis Dieser and Jill Marin with cake after the meeting. Both are leaving the board at the end of the year. Dieser was not present.
• The district spent $2.275 million in November, with over $1.55 million coming from the General Fund. The board accepted $3,020 in donations.