Lincoln-Way Annual Audit Report
Thursday, October 17, 2019

The financial health of Lincoln-Way District 210 continues to improve as shown through the results of the District’s fiscal year 2019 annual financial statement audit. At the October 17, 2019 Board of Education meeting, accountants from Wermer, Rogers, Doran, and Ruzon presented results from the District’s fiscal year 2019 annual financial audit.

The following is a summary of the results of the fiscal year 2019 audit:
• Over the past three years, the District has been able to improve its financial condition primarily due to the closure of Lincoln-Way North High School upon the conclusion of the 2015-16 school year as well as continuing to focus on controlling expenditures. In 2015, the Illinois State Board of Education placed the District on its Financial Watch list, its lowest rating. Because of the improvement in the District's financial condition, the District moved off the Watch List to a designation of Warning in 2019. It is currently estimated that the District’s designation will improve again in 2020 to Review status.
• The District's general obligation long-term debt rating remained at Ba1 in fiscal year 2019. On August 14, 2019, Moody's Investors Service upgraded the District's rating to Baa3 from Ba1.
• For the fiscal year ended June 30, 2019, the District governmental funds reported a combined all-funds surplus of $2,797,343. The operating surplus of $6,035,805 exceeds the Board of Education adopted fund balance policy that requires the District to achieve a 3% operating funds surplus each year until the operating funds reach a fund balance of 33% of budgeted expenditures.
• Total fund balances increased 13.6% in fiscal year 2019 from $20,609,559 at June 30, 2018 to $23,406,902 at June 30, 2019.
• On September 19, 2019, the School Board adopted a balanced budget for the 2019-2020 fiscal year with a combined governmental funds budgeted surplus of $5,926,532 and budgeted operating funds budgeted surplus of $2,796,250.

The external auditors provided the District with three opportunities for improvement:
• Comprehensive Policies and Procedures Manual- During fiscal year 2019, management partnered with a firm to review and document the District's internal controls into a comprehensive manual as recommended by the auditors. The District expects the completion of this manual in fiscal year 2020.
• Capital Assets- As part of the written policies and procedures manual, management will put policies and procedures in place for the maintenance of the District's capital assets inventory. Additionally, the District will continue to explore the cost effectiveness of a third-party appraisal in order to determine the starting cost for all of the District's existing assets.
• Expenditures in Excess of Budget in the Capital Projects Fund- In fiscal year 2019, the District incurred expenditures in excess of budgeted expenditures in the Capital Projects Fund in the amount of $16,376. The District is in the process of spending down the Capital Projects Fund balance to zero by the end of fiscal year 2020. Management will continue to monitor budget-to-actual on a regular basis.