Erline reviewed financial items for the month of July 2022 and highlighted substantial expenses.  As usual, the school incurs many start-up related expenses in July advance of the school year.  Classroom supplies and software licenses are among the normal expenses.  Additionally, capital expenses for work around the facility are paid during the first few months of the fiscal year.  

Erline reminded the committee that she is available to answer any questions. 

Lisa announced that in the past few days, the auditor sent the first draft of the completed annual audit.  Lisa is making the annual/required journal entries associated with retirement.  No additional sampling is necessary and Lisa should complete her review in the next week or so.

Because of the inflow of significant federal funds during FY 22 associated with CARES funding, Lisa is also working with the auditor on the required single audit to satisfy federal requirements.  This will be a separate report and Lisa anticipates the auditor will need another week or two.  The goal is to complete everything within the next month and satisfy reporting requirements by the end of November.  We will use the November FC meeting to review the audit reports and any recommendations with the auditor.  

School leadership expressed gratitude to the school community for being diligent and thorough in providing documentation to ensure compliance with policies, procedures and federal requirements.  Federal funds will require single audits through FY 2024. 

At the end of the audit cycle, Lisa will review the report with Ewa before she signs the 990 form in her capacity as Board chair.  

Lisa shared updated enrollment figures and discussed potential impacts to the FY 23 and FY 24 budgets.  She also shared the Budget Sensitivity Analysis that is constructed during the annual budget process to identify action items in the event revenue is projected to be lower than originally anticipated.  Because of anticipated enrollment counts of about 5.5% to 6%, the school will implement cost saving measures as well as increased recruitment efforts.  

Planned capital expenses will be reevaluated to reprioritize needs in the advance of lower revenues.  School leadership is also evaluating staffing levels and has identified several vacant positions that will not be filled in the current year.  The original budget was built assuming 117 employees.  Restructuring to a single principal model will allow the school to operate with 112 positions, saving over $400k in the current year.  Only critical positions will be backfilled in the event of turnover during the year.  

Leadership also is working on an action plan for more marketing and community events to target new applicants during the upcoming winter/spring application time frame.  The school does not anticipate being able to grow enrollment during this year as there is not much of a waitlist.  

Finally, the school is working through scenarios in which the school may need to operate at a lower enrollment level in future years.  This will allow for adequate planning in the event the school enrollment target of 800 is not sustainable.  

The school may need to utilize a small amount of reserves to balance the budget.  School leadership will continue to monitor and work with the Finance Committee in advance of the midyear budget revision.