CAVE CITY — Officials with the Caverna Independent School District were pleased with the district’s 2008-09 financial audit.

The audit, which was prepared by Campbell, Myers and Rutledge, was recently presented to the board of education and showed no findings.

“I was pleased with it,” said superintendent Sam Dick. “I knew we were in good shape.”

As of June 30, 2009, the school district had a fund balance of $1,824,009.

According to the management discussion and analysis letter, which is prepared by the school district personnel, the school district’s cash balance dropped by 12 percent last year. Its average daily attendance also decreased from 648 in 2007-08 to 646 in 2008-09 but the district’s enrollment for the 2008-09 school year increased slightly.

“Caverna Board of Education continues to make a concerted effort to keep our staffing in line with the state-mandated figures. This remains a constant struggle for a small district, however we have been able to meet our financial goals without cutting any programs,” the letter stated.

Penny Boeckmann, district finance officer, pointed out that the district continues to offer all-day preschool.

“We are one of the few schools in the state that does that,” she said. “We’re hoping early intervention helps.”

It was also noted in the letter that Caverna Middle School’s Kentucky Core Content academic index score increased from 70.2 to 78.3 for the 2008-09 school year and that Caverna Elementary School’s test scores continue to rise. Caverna High School is using the Reading Plus program to improve freshmen reading and comprehension skills. Carnegie Math was added a few years ago to improve math scores and abilities at the high and middle schools. The high school’s ACT scores have also increased by 1.5 points.

The letter also contained information about the district’s construction project at the elementary school that involved the enclosure of the last two pods to create six classrooms, which will allow the preschool to move into the main building for safety reasons and allow the family resource youth service center to move from a trailer to one of the outside buildings.

A new heating and cooling unit was added to the remodeled side of the elementary school and whiteboards were added to those classrooms.

The high school’s library underwent renovation due to a leaky boiler and was covered by insurance, with the exception of the cost to upgrade to a wood floor.

“Interfund transfers were made from the general fund to the technology fund for $6,518. This amount is required to get the state matching portion of technology funds. Indirect costs were also transferred from food service to the general fund for $18,406. Indirect costs are the food services portion of utilities, building maintenance and other overhead,” the letter stated.

The audit report revealed that the school district’s net assets exceeded its liabilities by $3,496,706 as of June 30, and the largest portion of its net assets reflects its investment in capital assets, less any related outstanding debt used to acquire those assets. The capital assets are used to provide services to students. Net assets had decreased by $231,623 over last year and the unreserved balance has decreased by $88,103.

“With the addition of several new full time instructional positions, we expect this balance to drop slightly next year,” the letter stated. “(The year) 2009 was a difficult year with cuts from the state decreasing revenues while local taxes increased along with federal stimulus funds leading to a decrease in total revenues of $87,522. State SEEK revenues decreased by $332,247 due to decreased enrollment. Part of this decrease is due to a new way the state calculates ADA. Investments interest is down due to interest rates declining,” the letter stated.

Total general fund revenues for 2008-09 were $7,473,658. General fund expenses were $151,989 less than budgeted.

Long-term debt payments in the amount of $117,014 were paid during the year for renovations to the elementary school. Payments will continue until 2013 for the bonds. Principal payments for the middle school improvements bond were $49,586 for 2007-08, the letter stated.

In the auditors’ report on internal control, it said, “We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses.”

In its report on compliance, the auditors wrote, “In our opinion, Caverna Independent School District, complied, in all material respects, with the requirements referred to above that are applicable to each of its major federal programs for the year ended June 30, 2009.”

In the auditors’ management letter, prior year comments regarding segregation of duties, insufficient record retention, capitalization of fixed assets and activity funds with deficit funds have been properly addressed and corrected.