Clean audit, midyear forecast show small projected balance; nutrition fund and maintenance costs flagged

The Bedford County School Board received a slate of financial reports and audit documents at its Feb. 13 meeting, including a clean audit opinion for county and school financials, a midyear budget forecast that projects the operating fund will end the year close to budget, and staff warnings about the nutrition fund and maintenance costs.

Mister Hagler reported the external audit was completed in December and yielded no findings. Documents posted with the agenda included the auditors’ opinion letter, internal control comments, required communications and the annual comprehensive financial report covering county and school data.

Hagler presented a second-quarter forecast (data as of Dec. 31) that projects roughly $124,000 less in revenue than budgeted, driven by lower basic aid tied to enrollment declines and offset partially by higher sales tax. On expenditures, operating fund spending is projected to be about $511,000 under budget, producing a combined projected ending balance of roughly $364,000 for the operating fund at midyear.

The presentation singled out maintenance as a pressure point, driven by inflation in contracted services, materials and higher electrical costs. Hagler said electrical and heating costs may increase further after colder weather and that a category transfer into maintenance may be necessary following the third-quarter forecast.

Hagler also reported the nutrition fund is approximately $475,000 “underwater” at midyear due to food and salary inflation. Staff told the finance committee they are pursuing revenue-increase strategies, school-level cost reviews and potential staff reassignments; if losses continue long term, local general-fund support may be needed.

The textbook fund holds about $1.8 million in reserves pending an upcoming math adoption that is expected to draw on that balance. A capital improvement plan and maintenance-reserve balance of about $7.8 million was reported, with major upcoming HVAC replacements at Staunton River High School and Liberty High School estimated as multimillion-dollar projects.

The health insurance (self-insured) fund began the year at about $4.8 million and was at roughly $4.6 million at midyear, a $200,000 drawdown Hagler described as an improvement from the prior year’s larger claims-driven erosion.

On grants and supplemental appropriations, Hagler announced a $61,000 federal security grant and three title grants (Title I, Title VI-B, Title II) with carryover adjustments; those supplements were presented for information and will return for formal action at the next meeting before forwarding to the Board of Supervisors for appropriation.

Several routine meeting motions were approved: the agenda, consent agenda and a motion to enter a closed session under the Code of Virginia provision cited on the record for candidate interviews. After closed session, the board certified the closed meeting by recorded vote and later adjourned.