...Burgin Ind. audit clean, but district ends fiscal year in negative position due to additional pension liability; finances otherwise healthy as long-term debt reduced

Harrodsburg Herald, Nov. 17, 2016

Burgin Independent gets clean audit
Struggling KRS Still Affects District Finances
By Robert Moore

Burgin Independent Schools received a clean audit for the financial year ending June 30, 2016. The district’s total net position is -$185,488.

The negative position is caused by something over which the district has no control, their total pension liability, which is $1,037,859, a significant increase over last year, when it was $760,000.

Joe Montgomery, the certified public accountant with White and Company of Lebanon who performed Burgin's audit, said the district’s contribution to the Kentucky Retirement System for classified employees decreased for 2016 from 17.67 percent to 17.06 percent. However, the district's net pension liability went up because the state cut its contribution to KRS by one percent, Montgomery said.

Under accounting practices which went into effect last year, school districts and other government entities which provide defined benefit pensions must record their longterm pension obligation as a liability.

"It kind of impacts your finances, but it's not something you can write a check for," Montgomery said.

There is little Burgin and other districts can do about it except wait, Montgomery said. While Gov. Matt Bevin has made funding KRS a priority, Montgomery said a solution was still not imminent.

"I think they'll fix it, but I think it'll take them several years," he said.

Not considering the pension liability, the district's net position improved $237,824 over the year before, which Montgomery attributed to efforts the administration has made to reduce their long term debt.

"Any time you're reducing your long-term liabilities, you're strengthening the district's financial situation," the accountant said.

Montgomery especially praised the district's new finance officer, Kate Sizemore, who started work at Burgin last year. "She's done an excellent job learning her job," Montgomery said.

The audit found no material weaknesses in how the administration handled district finances, but Montgomery did note the food service was losing money. He said school food services across the state were losing money and attributed the losses to federal regulation.

"All the food was going down the trash can," Montgomery said. "If the kids don't buy it, you don't get reimbursed by the federal government."

Other issues that came before the Burgin Board of Education last week included:

• The board welcomed their newest member, Ben Bradshaw. Bradshaw was elected to replace Lynn Russell, who is stepping down after 24 years.

"I'm not the new kid on the block anymore," joked Priscilla Harris, who has served on the board for 14 years.

Bradshaw has two children attending Burgin, one in third grade and one in kindergarten. His first meeting was informative.

Not only did the district receive their fiscal audit, but Superintendent Martha Collier informed the board that the school's ailing grinder would probably not last until the city of Burgin's new sanitary sewer system became operational. Russell recommended the district try to find a used grinder to hold them over.

Chairman Bob Clark held the decision as a teachable moment for Bradshaw. It wasn't all glory serving on the school board, Clark said.

"We've all learned more about that equipment than we ever wanted to know," he said.

 
 

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