The audit revealed that the district’s fund balance had decreased significantly, from $6,368,802 to $4,218,226. This decline was attributed to reduced state aid and local revenue losses, factors that have been ongoing challenges for the district. The financial presentation explained that a notable portion of the revenue shortfall stemmed from anticipated interest on investments, which had diminished following the exhaustion of federal pandemic aid.

Board members expressed concerns over these financial strains, particularly the implications of state aid reductions. The district had previously experienced substantial losses, with a $12 million reduction in state aid recorded over the past six years. However, it was noted that while past losses were severe, the situation regarding state aid was beginning to stabilize, offering a glimmer of cautious optimism. The conversation highlighted the district’s reliance on creative revenue sources, which had diminished in the current year, and the challenges associated with addressing a million-dollar shortfall in the budget. Despite these challenges, efforts to stabilize finances were acknowledged, with steps being taken to navigate the financial landscape.

A representative elaborated on the audit process, emphasizing the need for better budget management. They pointed out the district’s over-reliance on certain revenue streams and the importance of balancing the budget by reducing expenses. The conversation also touched on the unassigned fund balance, which is capped at 2% of operations and meant for cash flow purposes. Although these funds cannot be withdrawn, they are intended to generate interest and enhance revenue.

The board was also briefed on the co-op service program. The program generated over $6 million in revenue, with expenses totaling approximately $597,790. Despite the co-op’s interest income surging to around $450,000, it was clarified that the district does not own the co-op, and its funds cannot be utilized for the Hopatcong Board of Education. The co-op maintains a fund balance of $3.8 million, which must be reinvested into its operations. The hiring of additional accounting personnel was seen as a positive step toward better financial management, and the ongoing challenge of recruiting bus drivers was noted.

Further discussion ensued regarding capital projects and fixed assets. A specific capital project funded in part by state aid was analyzed, with particular attention given to the necessity of addressing capital projects that had not been prioritized in recent years. Progress was noted in reducing the number of audit recommendations, with an optimistic outlook for future audits.

The meeting also included a presentation of the Harassment, Intimidation, and Bullying (HIB) report. For November, three incidents were reported, with classifications including harassment and code of conduct violations. In December, three allegations were reported, with confirmations of HIB incidents and code of conduct violations. These incidents are scheduled for further review at the January board meeting.

Student achievements were acknowledged, with accolades given to students of the month at Hopatcong Middle School and recognition of Lila Gonzalez with the Sussex County Superintendent Roundtable award. A student representative provided an update on high school activities, highlighting a successful Spirit Week and achievements in athletics, such as the varsity basketball team’s victory and a first-place finish in wrestling by Jessica Lagunes. The drama club’s production of “Puffs” was also celebrated, along with the high school band’s upcoming Christmas Eve broadcast.