Columbus – Auditor of State Dave Yost today released the East Knox Local School District (Knox County) from fiscal emergency, a status it held for more than two years.
The district spent a combined four and a half years shifting between fiscal caution, watch and emergency because of deficit fund balances and a failure to adopt and submit an acceptable financial recovery plan.
“Today, the district and its community can breathe a sigh of fiscal relief,” Auditor Yost said. “The decisions were not easy, but they were vital to the financial upswing the district is now experiencing.”
The district, which enrolls roughly 1,230 students, erased a projected $3.3 million deficit, in part, by reducing staff by 27 employees for approximately $1.5 million in annual savings. Also, the district is saving $144,000 each year from the closure of Bladensburg Elementary School, in addition to $19,000 by charging lunchroom utility costs to the food service fund instead of the general fund.
During the current fiscal year, the district will begin realizing added revenue from a 10-year, $1.2 million annual emergency levy passed on Nov. 8, 2016. The district also implemented a “pay to participate” fee for athletics, increasing revenue in the general fund by $50,000 each year. The fee will be phased out in fiscal year 2018.
Additionally, the district had to satisfy the following requirements to be terminated from fiscal emergency:
Effectively implement a financial accounting and reporting system in accordance with Section 118.10(A) of the Ohio Revised Code;
Correct or eliminate all fiscal emergency conditions and prevent new ones from occurring;
Meet the objectives of the financial plan; and
Prepare a five-year forecast in accordance with standards issued by the Auditor of State; the opinion expressed by the Auditor’s office is “nonadverse.”
The Ohio Department of Education placed the district in fiscal caution on Sept. 4, 2012 due to deficit fund balances. Auditor Yost declared the district in fiscal watch on Sept. 30, 2014 before elevating its status to fiscal emergency on Feb. 5, 2015 after it failed to adopt and submit an acceptable financial recovery plan.
A full copy of this fiscal emergency termination is available online.