Annually, the district contracts with Malloy, Montague, Karnowski, Radosevich & Co., P.A. (MMKR), a certified public accounting firm in Minneapolis, to conduct an independent review of the district's financial statements and practices in accordance with state and federal laws and approved governmental accounting practices.  

REPORT ON FINANCIAL STATEMENTS

Annually, MMKR audits the district's financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of SSPPS, and the related notes to the financial statements, which collectively comprise the district’s basic financial statements as listed in the table of contents.

• District Responsibility - The district is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
• Auditor Responsibility - MMKR's responsibility is to express opinions on these financial statements based on its audit. The audit is conducted in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the district’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the district’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

MANAGEMENT REPORT

In conjunction with its audit of financial statements, auditors also prepare a management report, organized into the following sections:

• Audit Summary
• Funding Public Education in Minnesota
• Financial Trends of Your District
• Legislative Summary
• Accounting and Auditing Updates

The purpose of this report is to provide those charged with governance of the district, management, and those who have responsibility for oversight of the financial reporting process comments resulting from the audit process and information relevant to school district financing in Minnesota.

In accordance with Minnesota law, the district prepares financial reports and annual budgets. By June of each year, the SSP School Board adopts a budget for the following school year. 

For school districts, these financial reports include the detailed tracking of revenues and expenditures within a structure known as the Uniform Financial Accounting and Reporting Standards (UFARS). The Minnesota Legislature mandated that school districts use the UFARS reporting system. This system allows school districts to meet legislative requirements, establish greater accuracy in reporting, and provide financial accountability of public funds.

Annual Budget

The district's annual budget is comprised of all of the district's funds, some of which have designated purposes.

Budget Publication

Annually, the Minnesota Department of Education requires publication of the district's projects revenues and expenditures. 

School Budget Funds/Accounts

A school district’s operating budget is comprised of different revenue and expenditure categories called ‘funds’. These funds are established within UFARS in accordance with statutory requirements and Generally Accepted Accounting Principles (GAAP). Each fund maintains its own separate revenues, expenditures and fund balances. Schools currently use seven funds:

• Fund 01 (General Fund) - used to account for the general operating costs, such as educational activities, district instructional and student support programs, student support services, operations and maintenance costs and building and district administration.
• Fund 02 (Food Service) - record financial activities of a school district's food service program. Food service includes activities for the purpose of preparation and service of meals, snacks and milk in connection with school and community service activities.
• Fund 04 (Community Service) -  used to record all financial activities of the Community Service program, including Early Childhood Family Education (ECFE), School Readiness, and Adult Basic Education (ABE)
• Funds 07/47 (Debt Service) - account for revenues and expenditures for a school district's outstanding bonded indebtedness.
• Fund 08 (Trust) - the Trust Fund is used to record revenues and expenditures for the district’s flexible benefit plan. (No annual budget required)
• Fund 20 (Internal Service) - the Internal Service Fund is used for two purposes
  • Record revenues and expenditures for the district’s dental and medical self-insurance programs. (No annual budget required)
  • Record financial activity related to assets held in a revocable trust to finance the district’s Other Post-Employee Benefits (OPEB) liabilities.

Calculating School Property Taxes

The calculation of the school property tax levy for residents of South St. Paul Public Schools (SSPPS) is an annual, multi-step process involving partnership and coordination with various government agencies and taxpayers. 

• JULY - South St. Paul property taxes Public Schools property tax Calculation of the school portion of South St. Paul property taxes begins with the submission of estimated property tax levy information to the Minnesota Department of Education (MDE) by mid-July. MDE sets the maximum levy amount for each school district based on current legislation and formulas.
• SEPTEMBER - A preliminary levy is approved annually by the SSP School Board by September 30. The general practice to approve the maximum allowed to provide the district flexibility in calculating its financial needs once student enrollments are finalized in early October and additional adjustments are made in collaboration with MDE.
• OCTOBER-NOVEMBER - After completion of adjustments, a proposed property tax is submitted to Dakota County in October for inclusion on resident property tax statements, which are mailed to all Dakota County residents in late November.  
• DECEMBER - This property tax levy information is then reviewed, updated and certified by the SSP School Board prior to the end of the calendar year. Prior to approving the final property tax levy, the district holds a Truth-in-Taxation Hearing for all South St. Paul Public Schools residents, usually in early December.  

Distribution of Funds

The collection of the property tax levy occurs during the calendar year and is intended to be utilized during the upcoming school year. For example, a tax levy for the coming year that is certified in December is collected in May and October of the following year and is used for as part of the budget for that coming school year.