Auditor: District 113A Financial Situation Improving

Despite continued financial struggles, "is headed in the right direction," according to its 2010-2011 audit.

During a special meeting of the District 113A Board of Education on Tuesday, an 88-page draft of the the district's audit for fiscal year 2011 was presented by Ed McCormick, a representative from the independent accounting firm Mulcahy, Pauritsch, Salvador and Co.

Overall, auditors found that all district financial statements fairly represent the financial position of the district, McCormick said.

According to the audit, District 113A is still in a situation where its liabilities are exceeding its assets. However, the district increased its net assets over the 2010-2011 school year.

"You still have the deficit (where liabilities exceed assets), but you're increasing fund balances and going in the right direction," McCormick said.

Last year, District 113A saw a significant increase in its net assets, which include capital assets and buildings, McCormick said. Fund balances increased by about $1.4 million, and the general fund increased by more than $1.5 million.

"You still have a bit of a hole to dig out of and things are still tight, but you did see a marked increase in balances," he said. "... It's still not a pretty picture, but it's much better than the year before."

As part of the audit, accountants verify that the property taxes were allocated to the proper funds. In Cook County, districts struggle with allocations because of the timing of levies, tax rates and collections, McCormick said.

Districts must estimate where the tax dollars belong before having the final allocations, according to McCormick. In District 113A, this contributed to a negative cash balance in the Education Fund, which was corrected through an interfund loan.

Board Member Al Malley expressed concerns over the use of interfund loans to reallocate the money because they were not board approved.

McCormick said the state board "had no problem" with the interfund loans and the way the documents were presented, but offered another solution. The accounts can be reconciled by adjusting the funds with cash, McCormick said.

Because the school board does not need to formally accept the audit before it is filed with the state, McCormick said he will submit the revised report to the South Cook Intermediate Service Center by Oct. 15. The audit will be sent to the state board by Nov. 15.

The revised version of the audit will be presented to the District 113A board during its next meeting, which is scheduled for Oct. 18 in the , 15425 E. 127th St.