By Kaitlyn Kanzler, Special Writer
CRANBURY — The Board of Education was presented with its Comprehensive Annual Financial Review at the Oct. 2 meeting.
Bob Stewart of Inverso and Stewart, LLC, an auditing company based in Marlton, praised the district for its fiscal spending.
”The overall impact is that you’re in excellent financial shape,” Mr. Stewart said. “You have all your ducks in order for whatever you’re planning to do down the road and that’s the key. I really applaud the board on where you stand.”
The management discussion part of the audit gave the board a more in-depth look at the district’s financial status and how it got there.
According to Mr. Stewart, it is a summary of the general operating fund, which is where the tax rate is developed and where the fund balance developed from school operations.
The first column in the report shows the budget that was adopted for the 2011-2012 school year, the second column shows the actual results that ended on June 30, 2012, and the third column is the variance between the budget and the actual amount spent.
According to Mr. Stewart, the board said that it would collect $15.2 in revenue, but actually collected $15.5 million, an increase of $240,000, most of which was due to an increase in state aid.
According to Mr. Stewart, the district was given the choice to either use it in last year’s budget or use it for the 2012-2013 school year, which the district chose to do.
”You still have to record this revenue as (coming in) last year while you have that $194,000 in additional state aid,” Mr. Stewart said.
The budget planned on spending about $17.8 million, but actually spent $15.6 million, almost $2.1 million less than expected.
”That sounds like you’ve got a lot of money not spent in your budget, but when we get down to the analysis of your fund budget, you’re going to see that money has been set aside for specific purposes,” Mr. Stewart said.
A fund balance is like a personal savings account in case of an emergency, according to Mr. Stewart.
”You have to take money out of the (fund balance) unless you have sufficient revenue from other sources,” Mr. Stewart said. “And your revenue sources are state aid, which you can’t rely on, and district taxes, which are limited to how much you can pull out for district taxes.”
According to Mr. Stewart, the school district’s surplus of $2.5 million increased to $2.8 million with the district only using $222,000 from that surplus.
”You’ve got a lot of money, but most of this is set aside and is not available for you to touch because of one specific purpose,” Mr. Stewart said.
According to Mr. Stewart, $728,000 of that $2.8 million surplus is reserved for bills paid in July, August, and September.
Another $240,000 is set aside for future tuition payments, which will be put into the 2013-2014 budget as a revenue source and that money will be going back to the taxpayers, according to officials.
Some $849,000 is set aside for capital projects that are in the long-range facility plan. If there is a project that is proposed that isn’t in the long-range facility plan, it has to be amended with either voter approval or if the state designates the district as a Regular Operating District Grant (ROD grant). If the district receives a ROD grant, they will be able to use the capital reserve money as the local share of the ROD grant project.
The district’s total capital reserve amount is $485,000, according to Mr. Stewart.
Another $200,000 is set aside for a maintenance reserve, which is any project that the district may have.
According to Mr. Stewart, the district can only get the money through the budget process and if they want to do a maintenance project during the year, it would be too late to do it this year.
An additional $7,500 was put in to balance the current budget and the district is left with $331,000 of undesignated money to spend in case of an emergency.
”Having a lot of money may sound great, but unless you have it reserved or projected to be used in some way, you’re going to end up giving it back to the tax payers,” Mr. Stewart said.
According to Mr. Stewart, if too much money is given back to tax payers in one year, the tax rate will drop. If the district doesn’t have the same amount of money the following year, the tax rate will increase again, creating a ‘roller coaster’ tax rate.
The board actually spent 99 percent of last year’s budget due to capital projects and spent 92 percent of this year’s budget, according to officials.
The board received three minor improvement recommendations from Mr. Stewart.
The E-Certification, which tells the county that the superintendent and business administrator are being paid in compliance to state and federal laws, wasn’t filed on time.
The payroll agency fund, which is where the district withholds money from employees for things like federal taxes and Social Security, was backed up and the auditor was unsure who the money belonged to.
The last recommendation complained that the food service company the district uses was unable to supply the documentation needed at the time of the audit.
”I do about 40 districts in the state of New Jersey, and your business office is one of the most efficient, competent, most organized office we have out of the 40,” Mr. Stewart said.
The final Comprehensive Annual Financial Review is available on the school’s website atwww.cranburyschool.org.

