THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Sunday, September 24, 1995 TAG: 9509240034
SECTION: FRONT PAGE: A11 EDITION: FINAL
LENGTH: Long : 126 lines
Some sources of the school district's $7.4 million deficit for fiscal 1994-95: FEDERAL IMPACT AID
History: The federal government traditionally has provided ``impact aid'' to offset local school districts' costs for educating children of military personnel. For at least the past two years, Virginia Beach school officials have overestimated the amount the district would receive, and they already say the figure for 1995-96 may need to be adjusted.
Financial consequences: For 1994-95, the district budgeted $13.6 million but received only $8.7 million, a shortfall of $4.9 million.
How the decision was made: School officials have said former Superintendent Sidney Faucette wanted to end the practice of underbudgeting impact aid and turning over extra money to the city at the end of the fiscal year. SPECIAL EDUCATION
History: In May, Faucette told School Board members that the district had miscalculated the number of special education staff needed to comply with regulations and was required to hire 64 more people.
Financial consequences: Costs of $2.5 million more than budgeted for special education.
How the decision was made: Unclear, because Robert L. Mitchell, director of the division's Programs for Exceptional Children, disputes the figure. He said 28 additional special-ed teacher were hired after classes started and that the cost was $850,000. However, internal documents - including an audit memo - also make reference to the numbers being miscalculated. OTHER SALARIES AND FRINGE BENEFITS
History: In 1993-94, the school district overestimated student enrollment and staffing needs, and came up short in state aid. To compensate the next year, estimates were adjusted downward - but by too much. As a result, the district had to add 34 teaching positions in fall 1994. At the same time, the division overestimated the number of teachers who would leave and budgeted with the expectation of hiring less-expensive replacements.
Financial consequences: An additional $6.2 million spent for salaries and benefits in 1994-95.
How the decision was made: Unclear. COMMITMENTS CARRIED OVER
History: The district could not live within its budget for 1993-94. Chief Financial Officer Mordecai Smith blamed, in part, a mid-year pay raise in January 1994. In addition, the division allowed purchase orders to be filled up until the end of the fiscal year, a change from previous policy, officials said. To avoid a deficit, as much as $2.8 million in purchase orders were delayed until the 1994-95 fiscal year, in effect carrying over the debt.
Financial consequences: The district started the fiscal year with as much as $2.8 million committed from the previous year.
How the decision was made: It was part of a series of actions taken to balance the 1993-94 budget. STATE AID
History: The state's contribution to public school budgets is based on Average Daily Membership, an enrollment count. For 1994-1995, the school division based the amount of revenue it expected from the state on September figures, which are traditionally higher than the March figures use by the state.
Financial consequences: A $1.5 million overestimation in state aid.
How the decision was made: Unclear. COMMONWEALTH COLLEGE
History: In 1993-94, the school district announced that it had reached agreement to buy a building that housed the Virginia Beach campus of Commonwealth College for $1.75 million. Chief Financial Officer Smith said that the building was bought with operating funds rather than through the capital budget. Former Superintendent Faucette said the building was bought with a one-time reimbursement to the school division by the city at the end of the fiscal year.
Financial consequences: It is unclear whether the purchase contributed to the 1994-95 deficit, but it was an unbudgeted expense.
How the decision was made: Board members said they thought the building was available at a good price and it could house the adult education program, which had been displaced when its site was made into a middle school. CUSTODIAL SERVICES
History: In 1993, the school division entered into a five-year contract with a private custodial firm, the Illinois-based ServiceMaster. The company was to save the district $900,000 over the life of the contract by reducing the number of full-time custodial positions. But when ServiceMaster rescheduled some custodians and tried to terminate some workers, custodians and other school employees protested.
Financial consequences: $1.4 million in unbudgeted expenditures to buy out of the contract and bring in maintenance personnel.
How the decision was made: The board voted unanimously in August 1994 to get out of the contract. SLOPPY BOOKKEEPING
History: Math errors were routine and helped keep the district in the dark about how much money it actually had. According to a December 1994 memo from then-Internal Auditor Kevin A. Jones, there were $2.5 million in mistakes and typos in the 1994-95 budget. Money was also committed to more than one thing. According to an October 1993 memo from then-Chief Financial Officer Hal W. Canary, the district had planned to spend a $2.5 million surplus on $9 million worth of projects. And finance staff members didn't understand the computer systems they used to keep the records.
Financial consequences: Unclear.
How the decision was made: Unclear. TEXTBOOK FUND
History: This fund was established to keep money raised by renting textbooks separate from the district's other financial accounts and to help spread the cost of book purchases out over several years. Usually textbooks are bought in cycles with large outlays required in some years. Faucette wanted to close out the fund this spring because the district stopped renting books, and move the money elsewhere. The city's finance director warned him in an April letter not to do that because no money was left.
Financial Consequences: The textbook fund was overspent by $1 million. It's not clear whether there will be enough money next year to buy social studies books.
How the decision was made: The accounts were used to help balance the 1993-94 school budget. MEMO: This chart was compiled by staff writers Aleta Payne and Karen
Weintraub.
KEYWORDS: VIRGINIA BEACH SCHOOLS BUDGET by CNB