When is a surplus not a surplus? When it is already accounted for.
The school district announced it had an $803,845 operating fund balance at the end of its operating year in August—but also noted it really doesn’t.
School District 20 (Kootenay Columbia) financial statements showed a surplus to the first board of trustees meeting of the new school year, Sept. 24 in Blueberry, after a cash-crunched year that saw the board make difficult decisions, cutting teaching staff and tightening department budgets.
It seemed a puzzling situation in a have-not world, but the money was deemed “internally restricted” and was not available for the school district administration to apply against this year’s budget, said SD20 secretary treasurer Natalie Verigin.
“They are targeted funds, and anything not spent last year cannot carry forward into the new budget,” she told the board.
And the make up of the surplus was largely due to a five alarm bell response to a burgeoning budget covering for sick days.
When it became obvious the substitute (sick day) budget would have a huge cost overrun last year—it ended up over $400,000—Verigin had asked a few of the district’s departments to not spend their money.
The internally restricted, carry forward money ended up being higher than normal at $435,553 when the dust settled on the year.
“Our replacement budget was being used up so quickly that we were concerned we would be into a dire position that we would be dipping into our reserves,” she said.
Any money not required to cover the substitute budget will now be given back to the departments, Verigin said, and the $218,046 in reserves remains intact.
The district also had $97,121 in professional development obligations, $42,349 in targeted French funding carrying forward, and $10,776 in targeted grants.
“It really is committed money that hasn’t been spent … but to an outside pair of eyes it could look like a surplus,” said board chair Darrel Ganzert.
According to the collective agreement with teachers, the board puts around $80,000 into professional development on an annual basis, the teachers put in $20,000 on an annual basis, and that becomes the teachers’ professional development fund for the year.
That money has to be set aside, and it becomes part of that surplus.
As well, schools are given money on an annual basis for items such as textbooks. And sometimes the money is saved for a few years to help build a fund for a new program.
“So it really is committed money that hasn’t been spent, but it is committed in the fiscal year,” Ganzert said.
The school district ended up with $401,429 overspent covering for staff sick days, according to the substitute expenditure report at the end of the last school year.
The district spent $824,092 for its teacher-on-call budget in the last year, $158,779 over its $665,313 allotment. Family illness and bereavement leave also took $117,000 out of the budget.
“That’s where we knew we were headed into that direction,” Verigin said, with a total substitute budget last year of just over $1 million, including money for clerical, aides, support staff and sick leave.
But with a new budget of $1.43 million—including $880,000 for teacher on-call illness—Veregin felt the coming year should not pinch the district as hard.
“If the trend continues this year we should be well covered,” she said.
Last year the school district battled with a $1.55-million budget shortfall, compounded by the cost overrun in the substitute expenditure budget.
However, an unbalanced budget was not considered in SD20 last year since many trustees felt the facilities question—closing schools in Castlegar and Rossland—could provide a budgetary answer in the next two years, Ganzert said.
The new budget is expected to carry 14 full time job losses throughout the region—including two teacher-librarians, almost eight teachers, three non-enrolling teacher staff, and one custodian—although the cuts haven’t been confirmed.
The job cuts were deemed necessary for this year to deal with another $1.55 million operating shortfall in the district—and rising internal costs for sick leave—covering a three per cent drop in funding from the Ministry of Education.