Columbus – A performance audit of the Coventry Local School District (Summit County) released today by Auditor of State Dave Yost identified more than $1.8 million in potential savings, mostly by reducing the number of open enrollment students it accepts. The district admits the most open enrollment students in the state.

In FY 2014-15, the district’s 782 open enrollment students made up more than 37 percent of its total student population, bringing in nearly $4.7 million in revenue. Compared to resident students, the district generates $3,193 more in state revenue from each open enrollment student. However, the costs associated with teaching open enrollment students totaled almost $5.7 million in FY 2014-15, resulting in a $1 million net loss for the district. 

“If managed properly, open enrollment can offer struggling school districts a gateway to healthier finances and provide families important educational options,” Auditor Yost said. “But if you open the flood gates without a practical plan and reasonable limits, your finances will have a tough time staying afloat.”

By reducing open enrollment to a level that maximizes staff resources, the district could reduce expenditures by almost $1.6 million annually. Based on FY 2015-16 data, the district could admit 116 open enrollment students if it increases its total student to general education teacher ratio to 25:1. Alternatively, the district could admit 58 open enrollment students and still maintain its current 24:1 ratio. However, this option would limit the revenue the district receives from open enrollment.

According to the report, the resulting savings could go toward reducing debt payments, educating students and/or offsetting the reduction in state revenue to pay back State Solvency Assistance funds. 

The report also recommends the district establish open enrollment capacity limits by grade level, school building and/or educational program. Doing so would help the district predetermine the amount of open enrollment students to accept each year based on the number of openings. Additionally, this would allow the district to better define staffing levels and space availability without increasing expenditures. 

Auditors found that a resident student of Coventry generates an average of $9,867 in state and local revenue, after accounting for debt payments. However, an open enrollment student generates an average of $5,997 in state revenue only (local tax dollars do not follow the student out of the home district). When resident student and open enrollment student revenues are combined, the average revenue decreases to $8,701 per student. Consequently, resident student revenue is diluted by $1,166, or 13.4 percent.  

The Auditor of State’s office and Ohio Department of Education placed the district in fiscal emergency on December 4, 2015 due to the existence of deficit conditions and the district’s failure to submit a financial recovery plan. The district was previously placed in fiscal watch on May 15, 1997.

The Auditor’s office certified the district’s FY 2015-16 deficit at approximately $4.8 million. The district’s October 2015 five-year forecast projected a cumulative deficit totaling more than $5.9 million by FY 2019-20 if left unaddressed. That deficit includes the impact of renewal/replacement levies.

The district’s updated May 2016 forecast projects a reduced negative ending fund balance for the first four years of the period, but an increased negative ending fund balance of $7.1 million, excluding the cumulative balance of a renewal/replacement levy. 

If the district implements the recommendations within the performance audit and voters approve the renewal/replacement levy, the final ending fund balance in FY 2019-20 would be an estimated $2.9 million. In the event that voters do not approve the levy, but the district does implement the report’s recommendations, the deficit projected in FY 2019-20 would be reduced to $1.4 million.

A full copy of this performance audit is available 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.

Contact:
Ben Marrison
Director of Communications
614-644-1111