I attended the school board meeting on Monday night and waited until 9:30 PM for the budget discussion to begin.The majority of the meeting to that point was spent on the discussion and subsequent vote (7-2) for delayed school start times for 2019-20 school years. The approved plan moves the high school start time to 7:50 AM, middle school to 8:30 AM and elementary school to 9:10 AM. The financial cost to the District for the change in school start times is $610K (and not contained in the proposed final budget).
School start times is an important issue for many parents but with taxpayers facing the largest tax increase in decades, I was left wondering how does the District find the additional $610K in the 2019-20 budget which contains a projected operating deficit of almost $11 million.
The proposed final budget was approved (5-4) with a 6% tax increase; the public was told again that there is time to adjust that number. But the school board is running out of time – it’s the end of April and the 6% number has not moved since first announced in December.
The review and discussion of the budget was confusing to say the least. Remember folks, there is still the open issue about the $1.2 million accounting error caused by the delayed payment of a special ed invoice(s). This District’s accounting error has been discussed at two school board meetings, a finance committee meeting and a budget workshop over the course of 6 weeks yet the financial “can” continues to be kicked down the road with no resolution.
Residents and some school board members have repeatedly asked the business manager Art McDonnell for data on how correcting the accounting error impacts the budget … but he has yet to supply the corrected numbers.
The school district’s $1.2 million accounting error and lack of answers caused a group of concerned citizens (Ray Clarke, Neal Colligan, Mike Heaberg and myself) to send a formal complaint to the Pennsylvania Department of Education (PDE). For the record, the T/E School Board and Superintendent Gusick were copied on the letter. (Click on “formal complaint” link to read letter).
Although Art McDonnell maintains that the District’s accounting error is not a legal problem, apparently PDE does not agree with his assessment … as a result of our complaint, the matter is now under legal review at the Department of Education. The business manager also stated that the annual financial reports cannot be changed once submitted – again, not true. Art McDonnell, there is a “do-over” button! According to PDE, all you need to do is hit the revision button on their website to make the corrections!
It is absurd that citizens are now going to the Board of Education to get resolution — folks, this is not an insignificant problem. Where do we go from here?
I share with you Ray Clarke’s comments from the school board meeting:
Monday’s budget discussion and vote was a good illustration of the challenge facing even the most diligent of School Board members. They learned more than a year after the fact that not only was there an error in the numbers submitted to the Department of Education (PDE) to authorize the allowable tax increase for next year, but also that the error could have been corrected in time for consideration of this year’s tax rate. The arithmetic and PDE processes are a little complicated, so the most concerned of them request a full analysis from the Business Office. After six weeks and two meetings they finally tease out that the maximum accurate increase for the coming year is 3.9%, and that the district forwent an opportunity for a 0.8% additional increase for the current year. None of this is documented, and the Board and public have to wait until May 13th for whatever comes next. In the meantime, the Proposed Final Budget contains the 6% tax increase and the Board has given the Administration no mandate to come up with any concrete plans to balance the budget with a lower tax increase.
Because the Board can not, for some reason, accept the fundamental argument that our School District should base its taxing decisions on calculations that are materially correct, they are left with a problem. There are no experts in school district finances on the Board, so they tend (to a greater or lesser extent) to accept what is told them. They are told that the auditor said the error was not material and the audit was “clean”, but we know the audit is unrelated to the Annual Financial Reports (AFRs) from which the tax increase is authorized by PDE. They were told on Monday that the District does not complete a worksheet for the Exception, but we know that it does complete the AFRs which generate that worksheet. They were told on Monday that the calculation is “locked down by PDE, you can’t change it, it is what it is”, when we know from PDE that there is in fact a “Start New Revision” Button on the on line AFR system!
The community members who have asked PDE to look into this are not experts in school district finances either, so how do we know what the Board does not? We do know that there’s a problem with submitting incorrect numbers to the state and a problem with allowing the situation to fester, and we also know that it’s a good idea to get counsel from folks who do have the needed expertise and are not central to the problem themselves.
So I think it is past time for the Board to commission an independent review. Completely independent unaffiliated with the Administration. A good candidate for this would be the lawyer that has advised the Board in the past on financially complex contract matters, Jeffrey Sultanik of Fox Rothschild. In the meantime, I guess the public has to wait for May 13th, take some comfort in the four No votes on the Budget and rely on our neighbors on the Board to eventually come to terms with the fact that a 6% tax increase based on inflated numbers is just not tenable.