The Ashe County Board of Education (BOE) was given an unqualified report again this year in an independent audit of its 2011-12 financial statements.

The audit, prepared by Anderson, Smith and Wike PLLC, reported no material weaknesses in the board’s administration of its finances for fiscal year ending June 30, 2012.

Financial highlights of the report illustrate the board’s obstacles and its achievements during a period of continuing economic distress.

Net assets exceeded liabilities, “an indicator of the fiscal health of the board,” according to the audit report.

The board’s combined general and capital fund balances increased to $5,264,998, up $596,386 from 2010-11. The increase was attributed to cost saving measures, and use of American Reinvestment and Recovery Act grants for some expenditures which would normally have come from the general fund, according to the audit.

Ashe Superintendent Dr. Travis Reeves explained the district’s strategy on keeping its financial house in order and how it has prepared for past, present and future budget cuts.

“During the last three years, Ashe County Schools has strategically used ARRA and state stabilization funds, along with cuts in personnel through attrition, retirement and resignations, to help build the school system’s local fund balance in an effort to offset increased discretionary reversions from state government,” said Reeves.

He also explained the district’s request to the county last year for additional funding in light of the positive financial report the audit offered.

”Knowing that our federal dollars were exhausted in 2012 and that our state discretionary reversion increased, we asked the county commissioners to share the responsibility so that we would not have to significantly deplete our fund balance in one year,” said Reeves.

For 2011-12, the General Assembly again required the board to return a portion of their allocated funding, creating a shortfall of $756,447, up 12 percent from the year before.

In addition to a statewide 9.7 percent cut in public school funding, the audit report noted that available funding for public schools was further reduced by the GA’s lifting of caps and restrictions on charter schools.

State funding was based on Ashe County Schools enrollment or “average daily membership” (ADM) of 3,205 students, down from 3,263 for 2010-11.

The dip in enrollment worked to ensure continued Small County Supplemental Funding by keeping ACS just below the 3,239 ADM maximum. Funds of approximately $1.5 million per year are available to small school systems under SCSF.

The Ashe County Board of Commissioners increased current expense funding $125,000 to $3,760,520 in 2011-12, while capital outlay remained at $300,000. The county also continued support of the technology program, again appropriating $118,072, according to the report.

The county paid $760,105 in debt service for Ashe County High School, and $874,966 for Westwood Elementary, according to the audit.

The State Board of Education approved allocation of $2,896,202 in Qualified School Construction Bonds to the school system in 2010, which it used in 2011-12 to replace roofs on Blue Ridge Elementary, Mountain View Elementary and the career center at Ashe County High School. The bonds will be repaid using state lottery proceeds.

Ashe County Schools per pupil expenditure was $9,578 for 2011-12, up from $9,292 the previous year.

This included the child nutrition program, which “due to improved management strategies…operated in the black,” despite increased expenditures, according to the audit.

The report stated that “due to the state’s economic trauma,” teacher’s, school-based administrators, instructional support and support personnel saw no pay raises for a third year. While pay scale by experience credit rose again, actual pay levels remained stagnant.