Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities

Union Public Schools Management's Discussion and Analysis

Financial Analysis of Government's Funds

As noted earlier, Union Public School District uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.

Governmental Funds: The focus of the District’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the District’s financing requirements. In particular, fund balances may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year.

At the end of the current fiscal year, the District’s governmental funds reported combined ending fund balances of $96,303,287, with $1,537,680 of this total amount constituting non-spendable fund balance reserved for inventories. In addition, $65,741,563 is restricted for specific purposes: $918,641 in the general fund, $4,482,965 in the building fund for uses mandated by the Oklahoma Constitution including building erection and maintenance, security, utilities, and fire/casualty premiums; $15,094,504 in the sinking fund for debt service, and $36,653,069 in the bond fund for capital projects, $8,476,601 in the child Nutrition fund for school lunches, $80,908 in the gift fund restricted for purposes designated by the donor, and $5,996 in other governmental funds for arbitrage. Assigned fund balance totals $5,039,034 for compensating balances, early retirement incentive, and insurance recovery. Unassigned fund balance totals $21,514,306 and is available for spending at the District’s discretion.

The general fund is the chief operating fund of the District. At the end of the current fiscal year, unassigned fund balance of the general fund was $21,514,306. As a measure of the general fund’s liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total fund expenditures. Unassigned fund balance represents 15.83 percent of total general fund expenditures and total fund balance represents 20.73 percent of total general fund expenditures. The fund balance of the District’s general fund decreased by $659,731 from the prior year primarily as a result of a decrease in state and local revenue sources.

Controlling fiscal year-end expenditures to maintain a continuing level of fund balance is also a contributing factor to the District’s financial stability. The District relies on the ending fund balance to meet cash flow needs during the first six months of the following fiscal year. While a small portion of the revenue is collected during the first six months of the fiscal year, the significant revenue collections occur in late spring. This annual cash flow trend requires the District to increase the ending fund balance each year as the expenditure budget grows in order to meet cash flow requirements of the first six months prior to tax revenues being collected.

The revenue and expenditure budgets are revised during the fiscal year based on the final federal grant award notifications, state aid allocation revisions, actual revenue receipts, and other unanticipated increases or decreases in revenue or expenditures. Fiscal year 2021 general fund revenue budgets were revised during the year based on adjustments to revenue collections. The fiscal year saw a $506,491 decrease in local revenue sources, a $175,390 increase in state aid and property tax collections, and $219,971 in Federal Sources .

The variance in the final budget versus the actual revenues and expenditures revealed a variance in revenues of $(74,423) and a variance in expenditures of $1,423,572. This revenue variance is primarily due to higher than anticipated collections of Ad Valorem Taxes. The approved final expenditure budget was intentionally larger than anticipated actual expenditures to provide the flexibility necessary to manage any unanticipated revenue receipts and expenditures incurred in the final days of the fiscal year.

The sinking (debt service) fund had a total fund balance of $15,094,504, all of which was restricted for the payment of debt service. The net increase in fund balance during the current year in the debt service fund was $365,223. Millage rates for sinking fund levies are not controlled by the District but are set annually by the Tulsa County Excise Board after a thorough review of property valuations and the District’s debt service needs.