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Monthly finance report warns May payroll timing will sharply reduce fund balance
Summary
The district's April monthly monitoring report showed lower cash and investments than last year and warned that three payrolls in May will reduce fund balance by roughly $20 million, potentially leaving a $6–7 million balance at the end of May.
The Ann Arbor Public Schools finance director told trustees the district is about $5.1 million lower in cash and investments than a year ago and that timing in May will materially affect the fund balance.
Finance staff said May includes three payroll runs, adding roughly $9 million in expenses for the month. With projected May revenues of approximately $16 million, the director said the district expects to use about $20 million of fund balance in May, which would reduce total fund balance to an estimated $6–7 million at month end.
The finance presentation showed year-to-date revenues of $245 million (about 77% of budget) and year-to-date expenses of $231 million (about 72% of budget). The director cautioned that accruals and end-of-fiscal-year adjustments in June will further change the reported fund balance, and flagged the April ending fund balance as negative $4.8 million on a particular line-item view that requires further closing adjustments.
Trustees pressed staff for context on how prior budget assumptions were missed and when the district's external audit would disclose or reconcile differences. Staff said the external audit would have identified some issues in November and that an internal investigation into the budget process is ongoing.
The finance director said staff are monitoring May closely and will present May monthly monitoring data as soon as it is available.
