Financial report: Palmdale Aerospace Academy reports higher-than-projected year-end fund balance and compliance with bond covenants

Chief Business Official Missus Azura presented the academy's unaudited actuals, telling the board the school closed the year with an improved fund balance and that bond covenants and board reserve policy were met.

Azura said the fund-balance projection rose from a $2.6 million projection to about $3.3 million after auditors' adjustments and reconciliation of older items. "So this is our fund balance, and, really, this is what we really wanna look at," she said, describing reconciling items that included a property-tax reconciliation with the Pasadena/Palmdale district that added about $814,000 dating to 2018–19.

The report highlighted that almost 90% of revenue comes from LCFF and state sources and that salaries and employee benefits make up about 65% of expenditures. Azura said the academy's unrestricted net position is about $23 million and reminded the board that policy requires five months of reserves, which she quantified as a little over $19 million; she said the academy meets that requirement.

On bond covenants, Azura summarized the three standard tests: a current-coverage ratio (1.2 times annual lease payment), cash-on-hand minimum (45 days), and a net-asset covenant. She reported the academy passes each covenant. The presentation also noted that some variance lines—federal and other-state revenue—reflect accounting treatments that move expenses into the year to match revenues under public-school accounting.

Why it matters: the unaudited actuals frame the academy's near-term spending capacity, compliance with debt covenants and the size of reserves available for operations and contingencies. The audit is ongoing; Azura said auditors will review restatements and adjusting entries.

Next steps: Azura will continue reconciling balance-sheet items and the auditors will finalize entries; the board did not take formal action during the presentation.