St. Joseph School District administrators told the board July 24 that preliminary figures for the Annual Secretary's Board Report (ASBR) show an ending reserve ratio well below the board's 20% policy target, and that corrective actions will be required.

The district's finance presenter, Dr. Rockford (staff member), said the preliminary ASBR without late federal reimbursements shows a reserve ratio of 10.02 percent; including federal funds that arrived before year-end would raise that estimate to about 15.94 percent, still below the board policy target. He said the ASBR numbers are preliminary and must be finalized before the Aug. 15 filing deadline.

School finance matters matter because reserve ratios indicate how long the district can operate without expected revenue; a substantially reduced reserve leaves the district exposed to payment delays or unexpected costs. The board heard administrators'explanation of three main drivers behind the shortfall: declines or freezes in federal reimbursements, flat or declining state revenue tied to enrollment, and staffing and capital spending that outpaced revenues.

Administrators and the board outlined steps. Dr. Rockford said the district will submit the ASBR by the Aug. 15 deadline and will present a formal budget revision in October that reflects updated salary and benefit estimates, enrollment, and revenue updates. Superintendent-level staff and business office staff described plans to change submission practices for federal grant reimbursements (submitting in smaller batches earlier in the year) and to conduct a district-wide efficiency and reduction review. Dr. Rockford and board members said the finance committee and a broader community process will be included in the budget reduction planning.

Board members pressed for more accountability and earlier alerts. Board member Richmond said the board should not be surprised by year-end numbers and asked why potential shortfalls were not flagged earlier. Business-office staff said the timing of certified payroll (two months paid in June) and a budget under-estimate of benefits contributed to the large June expenditures. Administrators acknowledged some delays came from state-level reviews and some were internal process issues and said they will improve forecasting and monitoring.

The board did not vote on the ASBR at the meeting; several motions earlier in the agenda approved June financial reports and monthly bills (vote tallies recorded separately). Administrators committed to bringing a written reduction plan and an October budget revision showing revised salary/benefit assumptions and revenue forecasts. The district also said it has engaged a third-party review of federal program billing and will change oversight so academic services and the business office coordinate more closely on federal claims.

The item closed with board members asking for a short (5'6 page) corrective-action summary in October and inclusion of the finance committee and community representatives in planning.