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Report: Half of Florida school district audits find material weaknesses

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(The Center Square) – According to a recent report by the Florida Auditor General’s Office, 50.7% of audits of school districts found problems with internal controls, noncompliance with state law, rules or regulations or other issues.

The audits of 67 school districts were for the fiscal year that ended on June 30, 2023. Most of the deficiencies with the 34 schools found noncompliant were school safety (17), followed by financial record-keeping (16), information technology issues (10) and cash and investment controls (seven).

Auditors also found that 14 districts had 19 findings with federal funds that were questioned due to noncompliance with regulations regarding allowable costs or a lack of program documentation. These funds added up to $4.68 million, down from last year’s audit where $5.53 million was found.

The audit used a formula of dividing each district’s general fund balance by revenues to determine its financial condition ratio.

According to the report, the average ratio was 11.73%, a slight increase from last year.

Auditors said the ratios remained high in the last three years because school districts received and used federal funds for COVID-19 pandemic relief instead of using other operating revenue and also collected additional property taxes due to increased property values.

According to state law, school boards are required to maintain a general fund balance sufficient to handle normal contingencies. If the ratio drops below 3%, the district superintendent must inform the state education commissioner and the school board.

If the commissioner determines that a school district with financial condition ratio projected below 2% doesn’t have a plan to address the financial issues, the commission can appoint a financial emergency board to assist district leaders in resolving the financial emergency.

Only one district, the Gilchrist County School District, had a financial condition ratio below 3% and the report said its superintendent didn’t submit a financial condition notification to the Florida Department of Education as required by law. The report said the district “had significantly fewer resources available for emergencies and unforeseen situations than other school districts.”

The largest increase in financial condition ratio was Calhoun County, from 37.57% in 2019 to 86.26% in 2023, a rise of 48.69%.

The biggest decrease came from Franklin County, from 22.9% to 4.81%, a fall of 18.09%.

Some factors the reports cite as affecting school finances include increasing property tax collections, enrollment changes and the debate concerning larger, more centralized schools versus smaller ones.

The report cites Florida Department of Revenue data that shows property taxable values increased by 55% from $2.17 trillion in 2019 to $3.37 trillion 2023. Correspondingly, property tax levies for district operations increased from $14.16 billion in 2019 to $20.12 billion in 2023.

Enrollment numbers can vary despite the state’s overall increase of 5% from 2019 to 2023. Forty-nine school districts had enrollment growth, led by Hendry County with a student population that grew nearly 85% from 7,101 in 2019 to 13,133 in 2023.

Eighteen districts had decreases in enrollment, with only two, Broward and Pinellas, having a decline of 1,000 students or more.

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