Board approves Phoenix Elementary District FY25 annual financial report; staff flagged ESSER III decline next year

The Phoenix Elementary School District No. 1 governing board on Tuesday approved the district’s fiscal year 2025 Annual Financial Report (AFR) after a staff presentation explaining revenues, expenditures and fund balances.

The AFR documents the district’s revenues and expenditures for the fiscal year running July 1, 2024, to June 30, 2025, and is required by statute that the presenter cited. "The AFR is called the annual financial report. It is required by statute 19 dash 9 0 4 that must be presented and approved every year," an accounting presenter said.

Why it matters: the AFR is the official accounting of how the district used maintenance and operations (M&O), capital and grant funds during FY25. The report is audited by external auditors and is used for state reporting and, when applicable, annual comprehensive financial reporting that affects bond financing and district creditworthiness.

What staff presented: the district reported about $54.84 million in M&O expenditures and a total district expenditure across all funds of about $108 million for FY25. Staff said roughly 50% of M&O spending went directly to instruction and that salaries and benefits comprised about 88% of M&O spending (66% salaries, 22% benefits). The presenter noted capital outlay and classroom site fund totals and said grants included approximately $8.1 million in ESSER III funds included in the FY25 totals.

Staff cautioned that ESSER III funds are no longer available and that next year’s grant totals are expected to be lower: "ESSER III funding is no longer available through the district. Next year, we're not going to see or that column will not be 21,000,000; it's more likely going to be around 12 or 13,000,000," the presenter said.

Audit and accuracy: staff described internal reconciliation steps, Uniform Standards for Financial Records (USFR) verification and federal reporting checks. The presenter said the district is roughly 75% complete with the external audit and that auditors will present final findings to the board. Board members asked for a concise board update showing beginning balances, total revenues, total expenditures and ending balances across funds; staff agreed to provide those figures in a subsequent update.

Board action: President Trujillo moved to approve the AFR; a board member seconded. The motion passed on a voice vote.

What the AFR does not resolve: the presentation and approval are not an audit acceptance; the external auditors still must complete their review and present audit findings. Staff said the auditors will finish their work soon and will present any findings to the board for acceptance.