Net assets down for

District 88

By KREMENA TODOROVA

Journal Staff Writer

NEW ULM -- District 88's combined net assets decreased by $234,240, or 2.8 percent, during the fiscal year that ended June 30, 2004, according to an audited financial report released last week.

The report, which sums up districtwide information, uses accounting methods similar to those used in the private sector. The statement of net assets includes all the district's assets and liabilities. It also accounts for all the year's revenues and expenses, regardless of when cash or received or paid.

District 88's net assets were $8,057,588 as of June 30, 2004, the report shows.

Net assets -- or the difference between assets and liabilities -- are one way to measure a school system's health, according to Business Manager Donna Luhring. Over time, the increase or decrease in net assets can indicate whether a district's financial position is improving or deteriorating.

To assess the overall health of the district, however, additional factors need to be considered as well, Luhring says. These include changes in state funding for education and a district's property tax base, as significant revenues are derived from both state aid and local taxes. They also include the condition of school buildings and other facilities, which may require large future outlays to maintain.

The decrease in the District 88's financial position in the fiscal year 2004 is the product of several factors, Luhring states. Declining enrollment decreased revenues generated by the school district. In contrast, expenditures increased to cover costs associated with in-door air quality issues.

In summary, the report concludes, despite negative trends, the district is still maintaining a stable overall financial position.

Some more highlights:

* According to the report, in the fiscal year ended June 30,2004, District 88 received $395,453 less in revenue, compared to the year before.

Most significantly, state aid dipped $1,036,100.

This drop was partly offset by an increase of $492,035 in the local-tax portion of school funding, and smaller increases in program revenues -- such as charges for services.

In comparison, in the fiscal year 2004, expenditures decreased $125,228.

More significantly, spending on buildings and equipment dropped $999,963. Expenditures were also down, by smaller amounts, on instructional support services; vocational instruction; and district administration.

Expenditures were up on fiscal and other fixed-cost programs ($423,484) and, by smaller amounts, on exceptional education; district support services; and regular instruction.

* The district's total revenues for the year ended June 30, 2004 were $21,628,454. Of this amount, 64 percent came from state aid, 23 percent from program revenues, and 13 percent from property taxes.

The total cost of all programs and services was $21,616,751. Of this amount, 60 percent was spent on instruction, 24 percent on support services, 7 percent on site work, buildings and equipment, and 3 percent on each of fiscal and other fixed-cost programs; community education; and depreciation, interest and fiscal charges.