Textbooks and lectures may provide vital food for thought to thousands of eager minds, but equally important to the 9,300 students in the Kenai Peninsula Borough School District is the food for the belly served up each day in school lunchrooms across from Homer to Hope.
The district's student nutrition services department sells 840,000 meals annually, processing over $2.5 million in sales and federal reimbursements each year. It uses what is called a "point-of-sale" system to account for daily cash sales by individual school and individual student accounts, records of daily bank deposits by individual schools, and records of the individual status of the 9,300 student accounts.
But it is becoming increasingly difficult to do the accounting job necessary to record the daily participation of students in the district's National School Lunch and Breakfast programs because the software and hardware now in use is seriously outdated. Among other things, the suppliers of the software and hardware are no longer supporting the system, borough officials have said.
At its April 20 meeting, the Kenai Peninsula Borough Assembly introduced Ordinance 2003-19-46, which would appropriate $175,000 in supplemental funding to the district for purchase of a new point-of-sale accounting system. The ordinance gets a public hearing May 18.
To avoid dumping that cost on the strapped school district budget all in one year, the ordinance would appropriate the $175,000 from the borough's Equipment Replacement Internal Service Fund balance. The equipment replacement fund provides capital for timely purchase and replacement of borough vehicles and other equipment, according to Finance Director Scott Holt. A 2002 borough ordinance opened the fund to use by the school district. To date, the district has only used the fund once, buying a vehicle around the time of the 2002 ordinance, Holt said.
Essentially, the district will rent the equipment and software, paying $40,500 a year into the fund for the depreciable life of the system. That amounts to $202,500.
Holt explained that the extra $27,500 is not really interest, though it could be viewed that way, but rather a way of providing sufficient funding to buy new hardware and software in five years.
"We calculate the life of the item and from that establish what would be require to purchase it again," he said.
Holt acknowledged that in the world of computers and software, prices often go down, not up.
"But usually they enhance products in five years," he said. "To buy the state-of-the-art system, you would pay top dollar again."
By paying an additional $27,500 into the equipment fund ensures enough to buy improved software and hardware in five years, he said.
Holt also said the same payment program is used for purchases by all borough departments.
"The fund provides its users the major benefit of eliminating budgetary spikes caused by governmental accounting standards requiring capital expenditures be recorded in the year the equipment is acquired rather than amortized over the equipment's useful life," Holt told the assembly in an April 8 memo.
"Departments utilizing the fund can avoid this requirement and effectively spread the purchase price over the life of the equipment in the form of rent payments."
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