DENVER – Montezuma-Cortez School District RE-1 was one of nine school systems statewide to set off alarms on an audit of its financial health, which was released Monday.
The analysis by the Office of the State Auditor is like a check engine light on a car’s dashboard. It doesn’t necessarily mean there’s a problem, but it’s probably time to check under the hood.
In the case of Montezuma schools, auditors noted decreases in the district’s operating margin and the change in its fund balance.
The auditor found that 48 out of Colorado’s 178 school districts had at least one “warning indicator,” and nine – including Montezuma – had two. Montezuma was the only district on the Western Slope with two warning indicators.
“All (of the nine) have had budget cuts, by eliminating jobs or cutting back on their educational programs,” said Crystal Dorsey, a state auditor who helped write the report.
Dorsey presented the report to the Legislative Audit Committee on Monday morning.
Three other area school districts had one warning indicator.
Mancos School District’s operating margin fell from its 2010 figure, although it remained in positive territory.
Bayfield and Silverton schools were flagged because their funds for debt and interest payments are spending money faster than revenue is coming in.
Auditors focused their report only on districts with at least two warning indicators.
In written comments responding to the audit, Montezuma-Cortez administrators gave several reasons for the auditors’ warnings.
First, cuts in state support for public schools have hit the district, and the district has cut expenses during the last two years, administrators wrote.
Administrators used money left over from 2011 and 2012 to get through the current year. That triggered a warning in the fund-balance ratio, which compares how much money a district has at the end of the year compared to previous years.
Also, health-insurance costs have hit the district especially hard.
“The district has dramatically adjusted health insurance benefits and premiums to cover the rising health-care costs,” administrators wrote in response to the report.
The “generous benefits” of the employee-wellness plan forced the district to dip into its general fund, but the district has removed the benefit.
Although the 2013 budget anticipates overspending of $250,000, the number isn’t likely to be that high, because administrators froze the operating budget May 15, the district said in its written response to the audit.
Legislators did not have specific questions about Montezuma schools. At the end of the presentation, Sen. Steve King, R-Grand Junction, addressed school districts in general and thanked their leaders.
“Coming out of the worst recession of our lifetime, you have been presented challenges that previous generations have not had to face,” said King, who is chairman of the Legislative Audit Committee.