Audit: EBR schools surplus down but still sizable

• By CHARLES LUSSIER
• Advocate staff writer
• Published: Nov 7, 2009 - Page: 4B

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The East Baton Rouge Parish school system cashed in money this past year it had been holding in reserve, in the process shrinking its undesignated surplus from $80 million to $47 million, according to its latest audit.

Most of that extra spending during the 2008-2009 fiscal year stemmed from increased school construction.

Even so, $47 million is still a sizable amount of money left over for a school system that just five years ago was trimming spending and outsourcing custodial, maintenance and nursing services.

With little discussion, the School Board approved the audit Thursday.

The annual audit was conducted by Postlethwaite & Netterville.

The auditors gave the school system a clean bill of health, finding “no material weaknesses” in its internal controls. For 23 years running, the school system’s finance staff has won awards for the quality of its accounting work.

“Management in the Finance Department should be commended for the job they do,” said Mike Schexnayder, a partner in the firm.

The post-hurricane local economy, and millions in extra federal aid, helped create the surpluses. State and local school funding increased as well, though that has slowed as the hurricane’s after-effects have dissipated.

Spending grew by 9.3 percent in 2008-09, far outpacing revenue, which grew by just 2.1 percent for the same period. Revenue growth was primarily from property taxes; sales tax collections were flat.

The school system took in $554.4 million during the 2008-09 fiscal year and spent $567.3 million.

Revenue increased $11.5 million from the 2007-08 fiscal year, while spending grew by $53 million.

Besides increased school construction, about $6 million was spent on new textbooks. Also, the school system redirected about $7 million more to the state’s Recovery School District.

Much of the increase in spending, $40 million worth, was mandated by government accounting rules that went into effect two years ago. That figure estimates the school’s system liability for the future cost of medical insurance for employees who are already retired and current employees who will eventually retire.