BOE Meeting 1-25-10

The audit for school year 08-09 was released last night with the admonition from Mr. Lowdermilk, the auditor, that BCPS must rebuild the fund balance. In spite of all of the jabs that fly back and forth between folks on different sides of the issue, the fact remains that we must move forward. I’d like to clarify what I learned, and what I tried to say last night.

Preface: There are folks in the county who have been suspicious of the financial workings of the Central Office for years. It is natural to be suspicious of financial decisions that are made in the rarefied atmosphere of the school district: we see tax payer money spent on things we don’t always agree with, and we get the idea that it is easy for the finance folks and administrators to spend other people’s money (taxpayer money) with impunity. Sometimes suspicion is warranted, sometimes it isn’t. Either way, it is a phenomenon that all finance directors and central office administrators who work for school systems must endure. It is not unique to Burke County.

That said – I think it is evident from the testimony and the judge’s remarks in the Board of Ed /Board of Commissioners lawsuit that the school system did not do an adequate job budgeting for the expenses for the two new high schools (Patton and Draughn) in the last two school years. In testimony at that trial, we learned that the budget had not been built from the “ground up,” because the school system was relying on prior agreements between the Board and Commissioners to build the budget. I guess the Board of Ed historically saw the receipt of local money from the commissioners as an “allowance” rather than an “entitlement”. *

Anyway – back to last night. It was also pointed out that the school system had revenues under expenditures of $2,092,868 in 2008. (The spending in 2008 was appropriately approved by that 2007-2008 board with the proper budget amendments submitted by the finance officer at the time). This audit revealed that the revenues under expenditures were $1,613,087 for 2008-09. With the combination of state reversions, the sagging economy and the expense of the two new schools, it is no leap to conclude that these things had the most impact on the depleting fund balance in the last two years.

I do not want to get into the arguments about “who” caused the depletion of the fund balance. My concerns are more about why the board was not aware of the depletion of the fund balance when they were making significant monetary decisions last year. I know that members of the board asked publicly if the fund balance was adequate to handle the expenditures during this time. The answer was always “yes.” That is the question I tried to ask (rather clumsily) last night - “why didn’t they know?”

We can all agree to disagree about the wisdom behind the board spending last summer. To be sure, the board did know that the fund balance was lower than it had ever been when they made decisions. But, they were told there was a fund balance. I don’t think it helps anyone to continue to blame past board members for their actions or their impact on the final depletion of the fund balance. The fund balance is what it is, and we have to move forward.

Moving forward, I think it is imperative that this board has a handle on what money the system has, where money is being spent and making sure that money saving opportunities are not adversely affecting students. We know, according to the audit, that the board has been “blindsided” in the past year regarding finances, so I think we must insist on seeing a “state of the budget” at every meeting. The central office will have to be prepared to follow spending procedures to the letter, and to have the public and the board scrutinize spending.

When the administration “builds” the budget for next year, they must have adequate information and take into consideration the needs of the schools, the certified staff, the classified staff and the expectations of the public. I think we will be better prepared this coming year. The commissioners are on notice that the school system is probably underfunded, we have a third party reviewing the needs of the schools and we have a county-wide awareness that things have to change. (Of course we cannot change the economy or the amount of funds the county has access to, so whether an increase in funding can be secured remains to be seen.) When the time comes to set the budget, though, hopefully the citizens of Burke will let the officials in the county know what is important to them, so difficult decisions can be made with citizen input.

I welcome your thoughts about the audit. However, I would prefer this remain a conversation rather than a forum to discuss past decisions of the board - any board. What ideas do you have moving forward? What problems do you see moving forward? What concerns you about the audit findings?


*Having read some of the opinions random NC county commish/BOE lawsuits, it is clear to me that the school board/ commissioner relationship is pretty complex. Ideally, neither entity is supposed to be “above” the other. However, the fact that the school board has to play the “mother may I” game to secure local funding naturally leads to an imbalance of power. (This imbalance of power is one of the reasons that many feel that school boards should have taxing authority.)