A financial audit of the Liberty County School System showed that despite two findings, the district reported its 2010 finances in a “fair” manner, according to an official report presented to the board of education.
Georgia Department of Audits and Accounts auditor Russell Hinton noted that the system did not comply with Georgia code provisions that limit a system’s fund balance to 15 percent of the total budget and that it therefore had “an excessive unreserved, undesignated fund balance at the end of the fiscal year.”
As of June 30, 2010, the LCSS had $41,056,043.38 in its general fund balance and, according to the provision, it should not have exceeded $12,691,749.20, Assistant Superintendent for Administrative Services Jason Rogers said.
The purpose of the law is to prevent school systems from accumulating surplus funds though taxation without accounting to the taxpayers for how the funds will be spent, the audit said.
Rogers justified the balance by explaining that the school’s primary sources of revenue do not come in until later in the fiscal year, which runs July 1 to June 30. Some of the funds have been allocated for capital projects and will have their own line items in future budget statements, he added.
Property taxes, which accounted for $17.1 million of the system’s budget in 2010, do not come in until January and February — halfway through the fiscal year. Federal impact funds, which are allocated by Congress, also are a main source of revenue, but they are not guaranteed. Last year, they arrived in June, during the final month of the fiscal year.
Rogers provided the Courier with a sample ledger that demonstrates how the fund balance would dwindle from July to December if the system began at $39,126,370.72. With mostly usual expenditures, the balance would have depreciated to $820,485.32.
“Now that amount may seem like a decent amount to have in fund balance, but we’d be dangerously close to not making payroll for that month,” he said.
State funds, which accounted for the greatest revenue at $52,818,281.48, are divided by 12 and dispersed monthly.
According to Professional Association of Georgia Educators staff attorney Margaret Price Ciccarelli, schools that carry an excessive fund balance do not face any type of penalty.
“In fact, school systems are frequently encouraged to have a healthy fund balance because of the uncertainty of state and federal funds,” Ciccarelli said.
But some parents, teachers and taxpayers may wonder why the school system has continued educator furloughs if it is able to maintain such a high fund balance.
Recently retired LCSS employee Yvette Keel is among them.
“The source of frustration would be like anybody else. You’re losing salary and you’re being asked to do more for less salary,” Keel said. Before her retirement this year, Keel said, she and her coworkers heard rumors that other nearby districts had ended their furloughs.
This year, Liberty County reduced its furlough count from six days to three.
Of the nearest counties, Chatham, Bryan and Effingham have full calendars for 2011-12. Long, Wayne, Appling, Bulloch, Evans and McIntosh each have at least two furlough days.
“Two years ago when all this furlough stuff came about, they had been told that if they had more than 15 percent of the budgeted amount in reserves, they could not furlough teachers,” Keel said.
But according to Ciccarelli, there is no such law on the state books. In 2010, a law with similar intentions, SB 515, was introduced to prevent furloughs among systems with a single fund balance greater than 6 percent of the year’s operating budget. The bill passed in the Senate but languished in the House.
Though unpopular, furlough days are a prevailing solution in the majority of state districts, according to a Professional Association of Georgia Educators survey. Though data has yet to be compiled from 44 schools, only 33 out of a reported 136 schools are slated to have full years during the 2011-12 calendar year.
Of those 137 districts, the average number of calendar days is 185. The average number among reported systems that are using furloughs is 183. With a 187-day calendar, Liberty County is above both averages.
A full school year has 190 days, with students in school for 180 and professional staff working 10 days for pre- and post-planning, according to PAGE spokesman Tim Callahan. Any system that has fewer than 190 days on its calendar is imposing some type of furlough, he said.
“We certainly have sympathy for local school districts, which over the past couple of years have had to make some hard choices — in some cases having to choose between layoffs or furlough days,” Callahan said. In this upcoming legislative session, PAGE will lobby the legislature for funding that can restore full 190-day years.
Another finding in the audit indicates that the LCSS did not properly document reimbursements related to its Seamless Summer Nutrition Program. The error came as a result of mixed messages from the state department of education about how to document after-school snack reimbursements, Rogers said.