Columbus – Closing the elementary school and improving the cost effectiveness of the employee health insurance program can help the Hillsdale Local School District (Ashland County) save as much as $990,000, according to a performance audit released today by Auditor of State Dave Yost.

“The cost to withdraw the $1 for employee health insurance almost certainly exceeds the worth of doing so,” Auditor Yost said.  “Hillsdale Local Schools need to control costs, and this report provides a roadmap of savings that can help put the district back on the path to financial stability.”

An analysis of the district’s building utilization found that the district as a whole is using only 68.9 percent of its functional capacity.  The audit found that the district could save approximately $242,900 by closing Hillsdale Elementary School and reallocating students to the middle and high schools.  In doing so, the district could achieve a new utilization rate of 87.0 percent based on the FY 2017-2018 enrollment projections.

The audit also reviewed the district’s health insurance costs per covered employee and found it was spending significantly more than the statewide benchmark.  The higher prices were related to costly provisions, such as low deductibles and low maximum out-of-pocket amounts.  In addition, the employee contribution rate for single plans is $1.00 per month, which is one-tenth of one percent of the premium cost.  By lowering the annual insurance costs per employee and increasing employee contributions, the district could save approximately $399,800.

In June 2012, the Ohio Department of Education (ODE) declared the Hillsdale Local School District in a state of fiscal caution due to anticipated deficits.  Included in the district’s 2013 financial recovery plan was a ten-year, 1.25 percent earned income tax levy that was passed in November 2013.  However, the district’s May 2014 five-year forecast still projects an ending fund balance deficit of $3.7 million in fiscal year 2017-2018.  Due to this projected deficit, ODE requested the Auditor of State’s office conduct the performance audit.

A copy of this performance audit may be accessed online.

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The Auditor of State’s office, one of five independently elected statewide offices in Ohio, is responsible for auditing more than 5,800 state and local government agencies.  Under the direction of Auditor Dave Yost, the office also provides financial services to local governments, investigates and prevents fraud in public agencies and promotes transparency in government.