After implementing emergency, mid-year cost-savings measures, Sumter School District ended fiscal 2017 in the black with a net income - or surplus - of $779,230, its independent auditor said Monday in her official audit report.
However, the auditor, Robin Poston, said if someone would have told her that 12 months ago, she wouldn't have believed them.
"I would have said, 'Not gonna happen,'" Poston told Sumter School District's Board of Trustees on Monday night while presenting the Fiscal Year 2017 audit report. "But it did, and you should be given a lot of credit for doing what you did. You addressed the concerns, and you are moving in the right direction."
One year ago, Poston's fiscal 2016 audit report to the trustees revealed the district overspent its budget and finished with an annual net loss of almost $4.4 million, depleting its ending fund balance to $106,449.
With the net income this year, the district's total ending fund balance, as of June 30, 2017, is $885,679.
Poston, of Harper, Poston and Moree, P.A., in Georgetown, said she was very proud the board took the action it did to address the problems they had last year.
Those actions included hiring an independent financial consultant to guide the district through its financial difficulties and adopting an emergency financial plan from then-Superintendent Frank Baker to try to end the year financially solvent. That plan included eliminating 47 positions, cutting stipends and supply budgets and freezing various budget line items that amounted to $6.3 million in cash-preservation efforts.
New district Chief Financial Officer Chris Griner, hired in July, said last week those cost-savings measures essentially allowed the district to end fiscal 2017 with net income.
Regarding its $885,679 fund balance as of June 30, 2017, Poston said it's still not an adequate amount, and it led to her one non-compliance finding in the audit report.
In the spring of this year, the state Department of Education created a new state accountability act requiring all school districts have a minimum general fund balance equal to one month of general fund operating expenditures.
Poston said for Sumter School District, that translates to a $10.3 million fund balance.
But Poston said the district has addressed the issue by adopting a financial recovery plan, which was approved by the state Department of Education in the fall.
"It took a while to get into this position, and it's going to take a while to get out of it," Poston said.
When asked by board Chairman the Rev. Daryl McGhaney if she was comfortable with the district's progress, Poston said the district has made drastic strides at improvement but that it will take continued efforts.
She said it's very important during the next few years for the district to increase the fund balance in the general fund to get up to the minimum required standards, according to new state regulations.
"You can't rest on your laurels of last year because in one year it can go bad again," Poston said. "It must be a continual process of looking at cost and budget data and managing it. We do feel comfortable that Sumter School District is going in the right direction, though."