Background First Interim report prepared in addition to unaudited actuals and annual budget. Represents district financial condition through October 31, 2011 Reviewed by Governing Board, County Superintendent, Superintendent of Public Instruction, and State Controller Purpose is to ensure awareness regarding current and future financial obligations
Current Information District is able to meet projected financial obligations in the current year Expenditure reductions are necessary in order to meet obligations in subsequent years Determinations are made based on best known information and projections from trusted sources
Assumptions and “Trigger”Reductions Complete list of assumptions provided under separate cover Per AB 114, no midyear “trigger” reductions are included in current budget projections Department of Finance reports on December 15 Governor’s Proposal for 2012-13 in January
Budget Process June 8, 2011: Budget Assumptions June 22, 2011: Annual Budget and Expenditure Reduction Resolution July 27: 45 Day Budget Revisions September 14, 2011: Unaudited Actuals October 12, 2011: Expenditure Priorities and Class-Size Waiver November 9, 2011: Expenditure Reductions
Necessary Expenditure Reductions Current Projections Financial Balance 2013 $84,000,000.00 $84,000,000.00 $82,000,000.00 $82,000,000.00 $80,000,000.00 $80,000,000.00 $78,000,000.00 $78,000,000.00Axis Title Axis Title $76,000,000.00 $76,000,000.00 $74,000,000.00 $74,000,000.00 $72,000,000.00 $72,000,000.00 $70,000,000.00 $70,000,000.00 $68,000,000.00 $68,000,000.00 $66,000,000.00 $66,000,000.00 2011-2012 2012-2013 2011-2012 2012-2013 Total Revenue $73,159,292.00 $71,744,955.00 Total Revenue $73,159,292.00 $71,744,955.00 Total Expenses $83,063,700.00 $81,792,443.00 Total Expenses $83,063,700.00 $73,961,468.00
Deficit Spending Projected expenditures in 2011-12 now exceed projected revenue by $9,904,408 Significant reserve from prior year is being used to fulfill current year obligations Deficit spending trend is unsustainable
Good News, Bad News Good News: As a result of expenditure reductions and fiscal prudence, the projected deficit for 2012-2013 has reduced from $11.3 million (June) to $7.8 million Bad News: Projected deficit for 2013-14 remains at $12.1 million due to combination of ongoing deficit spending (which results in declining reserves), projected increased expenses and projected decreasing revenues
Financial Implications Combination of deficit spending and projected reduction in reserves creates a condition where we can not claim that we can meet obligations in subsequent years. As a result, we are self-certifying the CUSD as “qualified” in our submission to San Diego County Office of Education
Recommendation It is respectfully recommended that the Board of Trustees approve submission of the interim financial report as of October 31, 2011, including “Qualified” certification
A particular slide catching your eye?
Clipping is a handy way to collect important slides you want to go back to later.