Meanwhile, district revenue amounted to more than $42 million in 2007, an increase of $3 million - mostly from local taxes and state appropriations. Expenses also grew about $1.3 million, mostly from increased spending on instruction and student transportation. Total expenses exceeded $41.2 million.
The Kentucky Department of Education had placed the district in 2006 on the state financial watch list for failing to meet the contingency requirement at the end of the year. However, Sparks reported that the 2007 general fund balance amounted to $1.69 million, which exceeds the district's required 2 percent contingency and wiped off a finding from the previous year's audit.
Three other findings concerning interest deposits and the execution of treasurer and depository bonds also were cleared in the 2007 audit, although the audit issues three new findings of non-compliance.
The report says that the district's single salary schedule was not followed in accordance with state law, but school officials responded that immediate action was taken to remedy the matter once discovered.
The district also failed to properly publish tax rates or notify the Governor's Office of Local Development of new short term debt. School officials stated in the audit's response section that both requirements will be met in the future.
Three schools, including George Rogers Clark High School, Providence Elementary and Hannah McClure Elementary were also cited for bookkeeping errors.
"Overall there were some very positive activities that took place in your audit," Sparks said. "There are some areas of concern," he said. But he added that the district has taken care of them or has plans to address them this year.
Board chairwoman Judy Hicks commended Superintendant Ed Musgrove and staff for their work on the district's finances.
She said she was "very pleased that we are off this watch list by exceeding the 2 percent required contingency. Being beyond that 2 percent is just a refreshing thing for our district."
Musgrove said the audit shows that the district is living within its means.
"It just goes to show that last year, when we committed our self to improvement, everybody pitched in; we listened to what people told us; we also had a management team come in," he said. "It just goes to show me that we had all the pieces in place, we just had to make them work."