2001-02 |
| A fiscally healthy school district
is necessary to support educational programs both now
and into the future. A review of the 501 annual
financial reports received by PSBA's research department
shows that fourteen districts are operating with a negative
fund balance. |
| Table 1A |
Range
of Fund Balance, 2001-02 |
| Range |
Fund
Balance |
| |
Number |
Percent |
| Below
0.00% |
14 |
2.79% |
| 0.00-4.99% |
76 |
15.17% |
| 5.00-9.99% |
111 |
22.16% |
| 10.00-14.99% |
98 |
19.56% |
| 15.00%
& Over |
202 |
40.32% |
Source: Annual Financial Reports,
501 districts, 2001-02
| Table 1A presents a distribution
of district fund balances for the 501 districts. Financial
industry guidelines recommend that fund balances be
between 5% and 10%. At the end of the 2001-2002 school
year, 90 districts were below 5%. |
| |
| Table 1B |
Range
of Operating Position, 2001-02 |
| Range |
Operating
Position |
| |
Number |
Percent |
| Below
0.00% |
245 |
48.90% |
| 0.00-4.99% |
215 |
42.91% |
| 5.00-9.99% |
32 |
6.39% |
| 10.00-14.99% |
7 |
1.40% |
| 15.00%
& Over |
2 |
0.40% |
Source: Annual Financial Reports,
501 districts, 2001-02
| Table 1B presents the operating
position of the districts. The operating position is
the difference between actual revenue and actual expenditure
in the same year. As shown, there were 245 districts
where expenditures exceed revenues. Financial industry
guidelines recommend that the district operating position
always be positive (greater than zero). According to
the annual financial reports, 245 districts did not
meet the guidelines. |
|
Unique or unusual circumstances can cause the fund balance
to be below 5%. The same can be stated for the operating
position. Among the 245 districts where the operating
position was negative, several districts had planned
to consume their fund balances, which would result in
a negative operating position. If the operating position
is negative over several years, or the negative position
was not planned, problems could arise. |
| |
| Table
2 |
Fund
Balance and Operating Position, 2001-02 |
| |
Fund
Balance |
Operating
Position |
| High |
113.60% |
19.33% |
| Low |
-10.86% |
-12.41% |
| Median |
11.98% |
0.02% |
| Average |
15.05% |
0.09% |
Source: Annual Financial Reports,
501 districts, 2001-02
| Table 2 shows the high, low
and median (mid-point) along with the average percentages
for both fund balance and operating position. The range
of fund balance was from -10.86% to 113.60%. The median
was 11.98%. For the operating position, the range was
from -12.41% to 19.33%. The operating position median
was 0.02% and the average was 0.09% |
| |
| Table 3 |
Percent
of Expenditures, 2001-02 |
| |
High |
Low |
Median |
Total |
Average |
| Instruction |
71.18% |
27.79% |
57.70% |
58.11% |
57.52% |
| Support |
42.01% |
11.64% |
29.51% |
29.49% |
29.32% |
| Noninstruction |
6.78% |
0.00% |
1.87% |
1.93% |
1.87% |
| Facilities |
10.99% |
0.00% |
0.00% |
0.19% |
0.34% |
| Debt |
57.22% |
0.00% |
6.22% |
6.09% |
6.14% |
| Other |
46.68% |
0.00% |
2.14% |
4.18% |
4.81% |
Source: Annual Financial Reports,
501 districts, 2001-02
| Table 3 shows the pattern
of expenditures and the range (high-low), along with
the median and total percentages as well as the average. |
| |
| Instructional expenditures are between
27.79% and 71.18% of all spending. The median is 57.70%
and the total for the 501 districts is 58.11%. Within
individual districts the amount of debt service will
significantly alter the distribution. For example, a
small district with a new building usually will have
a high percentage of debt service and thereby reduce
the relative percentage of all other expenditures. In
2001-2002, the range of debt service was from 0.00%
to 57.22%. The median was 6.22% and the total for all
the districts was 6.09%. |
| |
| Table
4 |
Distribution
of Revenue, 2001-02 |
| |
High |
Low |
Median |
Average |
| Local |
90.67% |
16.85% |
52.89% |
53.43% |
| State |
75.47% |
9.03% |
42.43% |
42.32% |
| Federal |
21.28% |
0.00% |
2.15% |
2.94% |
| Other |
54.03% |
-0.02% |
0.00% |
1.31% |
Source: Annual Financial Reports,
501 districts, 2001-02
| Table 4 shows the range of
revenue by source. In 2001-2002, local source revenue
had a range from 16.85% to 90.67% of total revenue received
by districts. The median local revenue is 52.89% and
the average is 53.43%. State revenues from all sources
range from 9.03% to 75.47%. The median is 42.43% and
the average is 42.32%. |
| |
| Table 5 |
Distribution
of Districts by Expenditure, 2001-02 |
| Total Expenditures |
Number of Districts |
Percent of Districts |
| $0-$10,000,000 |
71 |
14.17% |
| $10,000,001-$20,000,000 |
170 |
33.93% |
| $20,000,001-$30,000,000 |
98 |
19.56% |
| $30,000,001-$40,000,000 |
59 |
11.78% |
| $40,000,001-$50,000,000 |
30 |
5.99% |
| $50,000,001-$60,000,000 |
20 |
3.99% |
| $60,000,001-$70,000,000 |
22 |
4.39% |
| $70,000,001-$80,000,000 |
6 |
1.20% |
| $80,000,001-$90,000,000 |
6 |
1.20% |
| $90,000,001 &
Over |
19 |
3.79% |
Source: Annual Financial Reports,
501 districts, 2001-02
| Table 5 shows the distribution
of districts by total expenditure. In 2001-2002, 71
districts (14.17%) operated with less than $10 million.
About 50% of all districts operated with less than $20
million annually. At the other end of the spending,
only 19 districts (3.79%) operated with more than $90
million each. |
| |
| Table
6 |
Distribution
of Districts by Per Pupil Expenditures, 2001-02 |
| Total Expenditure
Range |
High |
Low |
Median |
Average |
| $0-$10,000,000 |
$22,301.69 |
$7,222.33 |
$8,679.83 |
$9,084.93 |
| $10,000,001-$20,000,000 |
$15,980.08 |
$5,949.71 |
$8,439.63 |
$8,732.42 |
| $20,000,001-$30,000,000 |
$12,726.31 |
$6,930.50 |
$8,499.10 |
$8,793.60 |
| $30,000,001-$40,000,000 |
$11,406.95 |
$6,988.59 |
$8,906.21 |
$9,013.62 |
| $40,000,001-$50,000,000 |
$15,923.06 |
$7,325.37 |
$9,486.39 |
$9,956.78 |
| $50,000,001-$60,000,000 |
$14,169.46 |
$7,769.79 |
$9,362.96 |
$10,047.98 |
| $60,000,001 &
Over |
$21,222.30 |
$7,072.85 |
$9,723.56 |
$10,245.15 |
| Total |
$22,301.69 |
$5,949.71 |
$8,691.83 |
$9,113.32 |
Source: Annual Financial Reports,
501 districts, 2001-02
| Table 6 shows the range of
expenditures based on average daily membership. It shows
the ADM expenditures according to the range of total
expenditures. Also shown are the median and average
expenditures for each range. As total expenditures increase,
the low ADM spending increases. However, this is not
the case for the highest ADM spending. The median ADM
spending in 2001-2002 for each group generally was consistent. |
| |
| Each of the above elements is an
important part of a district's overall financial well-being.
A good fund balance provides a district with the ability
to adapt to unique or unusual circumstances. Relying
only on percentages for fund balance can distort the
picture. While the financial industry standard is between
5% and 10%, a district may need to maintain a larger
balance if it has a small operating budget and aging
facilities. Anticipated or planned use of fund balance
will result in a negative operating position. |
|
Percentage distributions of expenditures in school finances
generally will show the largest element of spending
being used for instruction. In a small district, a large
debt payment can distort the distribution and reduce
the percentage used for instruction. |
|
If you have questions about your district's fiscal health,
PSBA is prepared to assist you. Services include customized
workshops, responding to questions or a fiscal health
evaluation. For more information contact PSBA's research
department. |
| |
For questions or comments, contact David
W. Davare, PhD
at (717) 774-2331, ext. 3372, or (800) 932-0588. |
|
