LGISD Gets Good Audit, But Flagged for Track/Turf Cost Overruns

La Grange I.S.D. got a mostly clean bill of financial health according to the annual audit presented to the school board Monday night, Jan. 16.

Auditor Preston Singleton of the CPA firm Singleton, Clark and Co. presented the school board with an “unmodified opinion” for the 20212022 fiscal year, meaning the school’s financial statements were accurate and compiled in accordance with generally accepted accounting principles.

“We did not identify any material weaknesses or significant deficiencies in the financial internal controls,” Singleton said. “That’s very good.”

Revenues exceed expenditures last year by $495,490. However, Singleton noted that the school’s end-of-year general fund balance lost about $775,000. That’s because of an $1.5 million unbudgeted transfer from the general fund to the school’s capital projects fund. As a result, the school’s general fund balance decreased from $7,485,687 at the start of the year to $6,710,699 at the end of the year.

“That transfer out went over to the capital projects fund to cover some shortfalls in the district’s construction projects,” Singleton said.

Singleton said the $1.5 transfer from the general fund to the capital projects fund was never officially approved by the school board as a budget amendment.

School board member Calvin Mersiovsky asked what the $1.5 million transfer was for. Superintendent Andy McHazlett said the money was spent to cover cost overruns for the new track and field at the Leopard Football Stadium. Initially, the stadium project was supposed to be paid for with private fundraising by the La Grange Education Program Support Foundation (LEPS).

“The money that was raised, they couldn’t finish it off,” McHazlett said. “So the school came in and finished off the project.”

That decision took place before the school board hired McHazlett as superintendent.

“Money came up short with the projections from the architects and prices skyrocketed on construction materials and labor,” McHazlett said. “Quite a few school districts underbudgeted some major projects and had to find ways to pay for them. That happened here. The board knew about it and knew it had to happen, but it didn’t go through the approval process.”

“We did note noncompliance with material to the financial statements because of that budget overage,” Singleton said. “I know this is just an oversight. I wouldn’t worry about it too much about that.”

The school district issued a corrective action plan that stated the following: “Going forward, we will bring budget amendments to the Board of Trustees for all approved board commitments of fund balance.”

According to the audit, La Grange I.S.D. collected about $13.3 million in property taxes for its general fund. State aid amounted to about $5.4 million in the 2021-2022 school year, with about $608,000 in federal aid. Total revenues amounted to just under $19.3 million.

“That $19.3 million (in revenue) came in about 70 percent from the local level,” Singleton said. “That’s property taxes assessed locally.” The school district spent about $18.8 million last year. Expenses for instruction accounted for $10.5 million. Other major expenses included nearly $2 million for facilities maintenance and operations and just over $1 million for student transportation.

Singleton said the school’s $6.7 million fund balance represents just over four months of expenses.

“Even with the decrease, that’s still a good fund balance,” Singleton said. “Auditors often say you need to have three months of reserves in your fund balance. You’re at four months, so that’s very good.

“Overall, it’s a good audit,” Singleton said.