The Mehlville School District recently received an unqualified opinion on an audit of the district’s finances for the fiscal year that ended June 30.

An unqualified opinion is the best opinion any organization can receive, according to Daniel Jones & Associates, Certified Public Accountants, which performed the audit. The audit yielded no findings, restatements of accounts, material changes or management concerns.

The Mehlville Board of Education recently voted to accept the audit at a total cost to the district of $11,725, which is the same that the district paid for its fiscal 2007 audit.

School districts are required by law to have an audit performed every two years, but Mehlville has one performed annually.

Jamie Bahr of Daniel Jones & Associates told board members in December that the district received an unqualified opinion in all facets of the audit. Those areas are accounting of financial statements, compliance with state law and compliance with laws governing federal programs.

Daniel Jones’ independent auditor’s report notes that Mehlville prepares its financial statements on a modified cash basis of accounting.

The report states, in part: “In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position-modified cash basis of the governmental activities, the business-type activities, each major fund and the blended component unit of the District as of June 30, 2008…”

The audit report also states that the “Mehlville School District is financially stable and continues to strive to provide quality education and adequate facilities. The district has continued to provide educational services that are above average for a cost that is less than the state average…”

Daniel Jones & Associates also concludes, “We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses.”

Mehlville uses four major funds to account for its financial activity — the general fund, special-revenue fund, debt-service fund and capital-projects fund.

Among all governmental funds, the report states that Mehlville had total revenue of $102,614,636 for the 2008 fiscal year compared to $113,582,290 in fiscal year 2007.

But $14,170,605 of the 2007 revenue came from a one-time bond refunding amount in the debt-service fund. Because of this, the audit report shows that excluding that bond refunding, the district’s total revenues in fiscal 2007 were $99,411,685, indicating that total revenues grew in 2008.

The auditor’s report shows a 63-percent increase in the special-revenue fund, a 26-percent increase in the capital-projects fund and a 21-percent in the debt-service fund. This was offset by a 10-percent decrease in general-fund revenue from the 2007 to 2008 fiscal years.

The reports shows that most of the revenue increase in governmental funds came from local sources like tax revenues, which increased $3,506,054 from fiscal 2007 due to the increase in the district’s assessed valuation.

But even with this increase, it was offset by lower investment earnings due to lower rates during 2008, the audit states.

As for expenditures, the district spent $100,353,027 in fiscal 2008 compared to $93,380,003 in fiscal 2007.

Capital-projects expenditures increased by $800,460, the audit states.

Debt-service expenses, after removing the one-time bond refunding expense in fiscal 2007, increased by $1,341,892 as larger payments were scheduled in fiscal 2008 than in fiscal 2007.

As for fund balances, the general-fund balance decreased by $166,113 from fiscal 2007 to fiscal 2008.

The special-reserve fund balance in-creased by $407,959, and the capital-projects fund balance also rose by $1,261,015. The debt-service fund also saw an increase in fund balance of $836,527.

As for transfers, the district transferred $10,894 in fiscal 2008 from the general fund to the capital-projects fund to allow for the purchase of food-service equipment.

The audit report also shows that as of June 30, the district had $98,677,385 in total outstanding debt.

As of June 30, the school district had $16,686,570 in general-obligation bonds outstanding with maturities through February 2013. In fiscal 2008, Mehlville paid $5,155,000 of principal and $861,851 in interest on bonds.

Mehlville’s overall legal debt margin, which is the maximum general-obligation debt that a district is allowed, was $278 million as of June 30.

Mehlville’s $16,686,579 in general-obligation bonds are only 6 percent of the maximum allowable amount, and the district could legally issue an additional $261 million in general-obligation bonds.

Most of the district’s debt comes from $79,550,000 in lease certificates of participation that were outstanding as of June 30 with interest-rate charges over 15 years. In fiscal 2008, the district paid $2,325,000 in principal and $3,386,050 in interest.

The school district also entered into a lease-purchase agreement in the amount of $837,041 in fiscal 2007 to renovate the former St. John Elementary School site into the current SCOPE — South County Opportunities for Pursuing Education — building. This will incur interest-rate charges over 10 years. Mehlville began payments in fiscal 2008, including $68,914 in principal and $35,574 in interest.

Mehlville also had two Department of Natural Resources, or DNR, energy loans.

As of June 30, the outstanding amount on one DNR loan was $69,611 with interest-rate charges over the next 12 years.

The second DNR loan was $317,705 with interest-rate charges over the next 14 years.

In fiscal 2008, Mehlville paid $23,324 in principal and $15,137 in interest on both DNR loans.

The audit also shows that the district borrowed and repaid $3.3 million in fiscal 2008 as part of the Advance Funding Pro-gram, which allows districts to meet cash-flow requirements during the year.

The audit reports that districts like Mehlville with low fund balances that are also “heavily reliant on local tax revenue” use this program to meet cash flow.

In fiscal 2008, just shy of 70 percent of instruction and support activities were paid through taxes and other general revenues.

“The community, as a whole, is the primary support for the Mehlville School District,” the audit report states.

Superintendent Terry Noble thanked Bahr at the board’s December meeting for working with new Chief Financial Officer Noel Knobloch to complete the audit.

“I’d like to thank Jamie and her firm for working with us through our transition with a new CFO,” Noble said. “They allowed time for Noel to get his feet on the ground and came back later than scheduled to complete our audit. That really worked out well for our staff.”

The audit report can be viewed online by visiting

and clicking on the Finance link.

Jamie Bahr of Daniel Jones & Associates told board members in December that the district received an unqualified opinion in all facets of the audit. Those areas are ac-counting of financial statements, compliance with state law and compliance with