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HCPSS gets FY’20 financial report

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The Howard County Public School System (HCPSS) has received an unmodified opinion from CohnReznick, which is included in its Comprehensive Annual Financial Report (CAFR), for fiscal 2020. The unmodified opinion of the HCPSS financial statements certifies that the auditor found all audited financial statements, in all material respects, to be in accordance with the applicable financial reporting framework.

HCPSS received an adverse opinion for fiscal 2019, when auditors noted the lack of a plan to eliminate, or any positive movement towards reducing, the Health Fund deficit. During the fiscal year, HCPSS reduced the accumulated deficit in the Health Fund from $39.2 million to $18.7 million, a $20.5 million decrease.

“Since my first day leading the Howard County Public School System, I have been shining the light on this major financial issue and we have made fully funding our health care obligations for our employees and eliminating this deficit a top priority,” said HCPSS Superintendent Michael Martirano. “I want to commend our staff who have worked diligently to manage the [fiscal] 2020 budget amidst a pandemic, ensuring that HCPSS not just stay the course but go even farther than our original plan to incrementally reduce the deficit and reverse the adverse audit opinion.”

For the fiscal period ending on June 30, 2020, the HCPSS Health Fund deficit decreased by $20.5 million, from $39.2 million to $18.7. In fiscal 2020, health expenses came in under budget, generating savings within the fund. At the same time, budget reservations and managed hiring and spending practices generated additional savings. These savings, combined with the action to use $7.2 million from the HCPSS fund balance contributed to the deficit reduction.

From fiscal 2015 through fiscal 2018, the Health Fund was underfunded, contributing to an accumulated deficit of $39.2 million. A detailed description of the history and factors contributing to the deficit is provided online. The full report is available at www.hcpss.org/f/aboutus/cafr2020.pdf and additional information is available via www.hcpss.org/about-us/financial-reports.

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