Making the Grade: FDCSD Among Top 3 Districts in State for Financial Health - from The Messenger
The Fort Dodge Community School District is one of just three districts in the state meeting both measures of financial health, Director of Financial Services Brandon Hansel told the School Board last Monday.
After completing the financial snapshot at the close of fiscal year 2021, which runs from July 1, 2020, to June 30, 2021, Hansel presented the report to the Board of Education.
“At the end of the fiscal year, our assets were $28.9 million and our liabilities were $19.7 million, leaving us with a fund equity of just under $9.2 million,” he told the board.
The two main measures by which the district’s finances are tracked are the solvency ratio and the unspent authorized budget ratio, Hansel explained. The solvency ratio is the measure of the general fund equity against total general fund revenues, and the unspent authorized budget ratio shows how well the school district does at living within its statutory spending limitation given to it by the state of Iowa.
“Both of these metrics give us insight into how well we are positioned to pay our bills, respond to unforeseen circumstances and navigate student enrollment fluctuations,” Hansel said. “Maintaining adequate levels of financial reserves helps the district create a stable and predictable environment for taxpayers, district employees and student programming from year to year.”
The other two districts in Iowa who currently meet both measures of financial health are Southeast Polk and Iowa Valley.
“As you can see, it was a great year overall, all things considered,” Hansel told the board. “We successfully navigated through all that occurred as a result of the closure and virus-related issues, and we still were able to accomplish our goals. We do need to recognize our team of directors and principals who execute on our overall budget strategy.”
Another measure of financial health that Hansel highlighted for the board is the days net cash ratio, which shows how many days the district can continue to operate without any additional cash flow.
The district had just over $13 million in cash reserves at the end of FY21, and it costs just over $130,000 each day to keep the district running, so the district has about 100 days worth of cash on hand should something happen and cash flow is halted.
A decade ago, the FDCSD was on a School Budget Review Committee workout plan for finances and had at least one major fund that was insolvent.
“The district has made tremendous progress in restoring its financial health over the last 10 years and I hope the community can have confidence in the financial management of the school district,” Hansel said. “There is currently no shortage of challenges facing public education and our school board does its best to ensure that finances are not one of them.”