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District 113A: Negative Cash Balance Caused by High Benefit Costs, Lower Than Expected Revenue

District board member and spokesperson Lisa Wright released a statement Monday afternoon addressing questions that arose during a July 19 board meeting.

School board officials in say a negative cash balance in the district's Education Fund last month was caused by lower than expected revenue and higher than expected benefit costs.

In a statement released Monday, District 113A Board Member and newly appointed spokesperson Lisa Wright finally addressed questions surrounding the district's Education Fund and its projected cash balance of negative $329,568 at the end of June 2011.

According to the release, the cash shortfall was caused by inaccurate projections of expenditures and revenues made earlier in the month.

"As soon as the fiscal year-end financial statements were completed, it was then confirmed that revenues did not meet projected targets, and expenditures for medical benefits were higher than projected for the Education Fund," the release stated. "Consequently, the result was a negative cash balance for the Education Fund before final accrual entries were made."

Board members were informed of the issue in which former District 113A Treasurer Jay Tovian presented a draft of the tentative budget for the 2011-2012 school year.

Per Illinois State Board of Education guidelines, school district budgets must show a zero or positive balance at the end or beginning of any fiscal year.

Last week, District 113A board members voted unanimously during their monthly business meeting to address the negative cash balance. The decision was made after consulting with ISBE officials and an independent auditor, the release stated.

Under modified accrual accounting, "transactions are recorded when they occur, even if cash is not directly impacted," the release said.

Despite the deficit in the Education Fund, the district was never short cash, the statement said.

District 113A maintains a single bank account for its operating funds: Education, Operations and Maintenance, and Transportation. All operating cash is pooled into one account, but each fund operates separately, maintaining its own financial statements and reports of revenues and expenditures.

Although there was sufficient cash to cover all checks issued, District 113A administrators decided to hold some checks until they received $5 million from tax anticipation warrants issued to . None of the payments were late, according to the release.

Tentative budget for fiscal year 2012

Under the tentative 2011-2012 budget, the district is projecting $21.52 million in revenues and $18.17 million in expenditures—giving the district a positive balance of about $3.35 million at the end of June 2012.

The budget will be on display for 30 days before the board holds a public hearing and votes to adopt a final draft during a Sept. 20 business meeting.

Amanda Luevano August 26, 2011 at 05:58 PM
Hank, I never said I didn't understand school finances. I said I'm not an authority on school finances. People comment on this site and ask questions. I cannot be responsible for answering questions on District 113A finances all the time. That's not my job. If it pertains to the story, I can do my best to get answers. When I don't understand something, I ask a question. I've put in a lot of time at this point with officials from both Lemont districts, as well as officials from ISBE and attorneys. I would say I have a pretty good understanding at this point. I just don't claim to be an expert. I read through all the financial statements. If you look at them, there were interfund loans--the ones that were approved by the board to cover the TAWs. Nowhere in those documents do you see proof of "transfers," which is why I said the statements seemed to back up what Tovian/Ricker said. And if you went to the last meeting, Malley even said the real issue was how the cash balance became negative. This article was meant to answer that question. Malley never questioned the validity of how it became negative because we didn't have that answer until Monday.
Jack Mikolajczak August 26, 2011 at 06:35 PM
If I can quote a previous post..."I look forward to Hank's response." Happy Friday All...Go Hornets!!!
Amanda Luevano August 26, 2011 at 07:09 PM
And when I say this article was meant to answer this question, I mean from the district's perspective. Everything is attributed. At the August board meeting, the district elected a spokesperson. I realize there is a lot of controversy, but when someone is an official spokesperson, they are an official source. Lisa Wright is now the spokesperson for the board, so as a reporter I have to honor that. I realize this is a divided board, so I'm in a position now where I have to wonder what is coming from the board and what is not. It's a tough spot, but I do my best to be fair in all circumstances. And I called Aurelio and Malley today (just to show good faith)--both said they would like to move forward from this issue, as it has been resolved. That's all they said. To emphasize the point, this is what the district said happened. I
Amanda Luevano August 26, 2011 at 08:31 PM
The last sentence should not have been there. I was editing my comment and forgot to remove that. My apologies.
Quizzical August 26, 2011 at 11:57 PM
Beth, no offense taken. It just seems to me like some people take a the word of a person or people at face value without even bothering to find out the facts. There are a lot of "facts" that we don't know about why our district is in the financial problems they are.I don't care who was at fault- I just want to know what happened to millions of dollars.If we don't know what happened- we can't avoid repeating it. - Amanda- I appreciate your comments below about trying to find out the facts and reporting it. I don't care about who is enemies and who are friends- I just want to know where my tax dollars are going, and what is going to happen to the kids and future of our schools if this problem doesn't get taken care of. So thank you for trying to be careful in getting facts and not comments.

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