Statement of Net Position - Proprietary Funds

Union Public Schools Management's Discussion and Analysis

Financial Analysis of Government's Funds

The bond fund had a total fund balance of $36,653,069, all of which was restricted for capital projects. The net decrease in fund balance during the current year in the bond fund was $(5,267,943). This decrease in fund balance is primarily due to reduced capital outlay expenditures. On February 13, 2018 district voters approved a $128.6 million, 5 year, bond proposal to be issued over five years from 2018-2022 which included funds for: site improvements; acquisition of textbooks, media books and instructional hardware/software, and acquiring transportation equipment. Because of its strong patron support base, the District is prudent to keep bonded capacity at traditional levels while not imposing an undue tax burden on the community. More information regarding bond funds and millage levies may be found in the Statistical Section. Statutory requirements dictate that bond funds be used for the voter-approved purposes of acquiring school sites, constructing and equipping new school facilities and renovating existing facilities.

The building fund is included as a Non-Major Governmental Fund. This program had a total fund balance of $4,482,965. The net decrease in fund balance during the current year in the building fund was $3,180,563. The decrease in the fund balance is due to the expenditure of funds received from the City of Tulsa for a community health center on Ochoa Elementary grounds. The variance in the final budget versus the actual revenues and expenditures revealed a variance in revenues of $90,867 and a variance in expenditures of $2,496,466. The large variance in expenditures is due to the allowance in the budget for final clinic expenditures. The Oklahoma Constitution allows the building fund to be used for erecting, remodeling, repairing, or maintaining school buildings; purchasing furniture, equipment, or computer software; paying energy and utility costs purchasing telecommunications services; paying fire and casualty insurance premiums; purchasing security systems; and paying salaries of security personnel. The ending fund balance will be used for those purposes. The building fund revenue and expenditure budgets are revised during the fiscal year based on the actual revenue receipts and other unanticipated increases or decreases in revenue or expenditures. The revenue and expenditure budget were increased due to the anticipation of one-time funds from the City of Tulsa for a community health center.

The child nutrition fund is included as a Non-Major Governmental fund. This program had operating revenues of $12,106,758, and expenses of $10,409,109 for the fiscal year 2021. Child nutrition expenditures remained stable as the District has made a concerted effort to provide more healthy food options for students. The Child Nutrition fund ended the year in a positive financial condition. Management has reviewed this program and, barring any unforeseen circumstances, the Child Nutrition program should remain stable and require no support from tax revenues.

The student activity fund is included as a Non-Major Governmental Fund. Student activity funds are used to account for student raised funds, along with District activities not accounted for in the general fund. The program had revenues of 1,073,240 and expenses of $1,147,354 for the fiscal year 2021. The gift fund is used to account for funds donated for specific purposes. The gift fund had revenues of $797 and expenses of $5,921. The arbitrage fund is used for arbitrage, revenue was $3 and expenses were $4,007.

General Fund Budgetary Highlights

Union Public School District adopts an annual appropriated budget for its general fund. The District’s budget is prepared according to Oklahoma law and is based on accounting for certain transactions on a basis of cash receipts, disbursements, and encumbrances. The most significantly budgeted fund is the general fund.

For the general fund, budget basis revenue was $129,417,617 with original budget estimates of $125,273,781 and final budget estimates of $129,492,040. The majority of the revenue variance came from higher than anticipated Ad Valorem Tax receipts.

The final expenditure budget was intentionally approved to be larger than needed in order to provide the necessary spending authority to the District by the Board to meet the State of Oklahoma spending requirements. The District must have sufficient budget spending authority to allow for any unanticipated revenues that might be collected during the last thirty calendar days of the fiscal year. During 2020-21, the majority of the additional spending authority was allocated to the instructional, instructional staff, and operations and maintenance function areas. Although the revenue collections were higher than the final revenue budget, spending was curtailed making it unnecessary to revise the budget in order to stay within the carryover limit required by the Board. Union carried forward a budgetary ending fund balance of 11.07 percent.