While Archuleta School District Finance Director Janell Wood jumped right into showing members of the board of education which page of the fiscal year 2014-2015 budget held the adoption resolution, any hopes that it would simply be read at the beginning of Monday night’s meeting without discussion were soon dashed.
“I’d like to make a few remarks before Janell goes ahead, because it might change what she is going to say,” board member Bruce Dryburgh interjected.
When Wood confirmed she had not planned to discuss details of the budget because the board had already done so at a budgetary work session the previous Friday, Dryburgh continued, “I think everybody knows I have a great deal of problems with this (budget) and I have struggled over the weekend to come up with what I hope is a compromise that everybody will go with. I don’t want to vote against the budget; that doesn’t look good.”
Dryburgh then made two suggestions that would lower the budget deficit, which was presented as $1,085,070. He said they could increase the revenue side of the budget by adding in $300,000 worth of Secure Rural Schools funding and, “decrease the expenses by $69,600 by spreading the audit amount over five years, as the payment terms dictate.”
While Dryburgh volunteered to read the adoption resolution himself if everyone else agreed to his suggested changes, superintendent Linda Reed spoke up, “Just a clarification: the audit findings by CDE (Colorado Department of Education), which we are appealing and which will probably come down some more anyway, so if they come down more than that, would you like (the budget) to reflect that?”
While Reed also clarified that the total amount for the audit was $87,000, neither she nor Dryburgh explained what the audit was about or why the CDE had charged the district that amount of money.
Wood explained it would take a while for her to change the budget summary on the last page of the budget, which would affect the resolution the board needed to read and adopt, but she would get to work on it right away while the board discussed other matters. State statutes require the final budget be adopted before the end of the month, and Dryburgh didn’t want to postpone the matter to another emergency meeting.
“Being respectful to Bruce’s expertise,” board member Joanne Irons then added, “if it’s not too much of a headache, fine, but I don’t really find it necessary, because … we work with a team of people who know what’s ahead of us and I put my faith and expectations that the staff will do exactly what we’ve asked them to do, which is to reduce expenditures as we see what our revenue will be next year.”
Board member Brooks Lindner agreed with Dryburgh’s suggested changes to the budget, while board president Greg Schick also expressed confidence the district would receive SRS funds.
Wood continued to work on changing the budget while the board went on to discuss other matters. When she was finally ready to resume the budget discussion, Wood read the new totals. The only items that had changed were revenues for the general fund, which had increased to $15,890,341, and the total appropriation, which was now $20,293,483.
“That brings us down to a negative cash flow of $715,470,” Dryburgh concluded.
Schick then explained the plan is to gradually reduce the budget deficit over the next three years so that when the district is finally able to adopt a balanced budget it will have reduced its reserves to a more reasonable level. The district currently has enough in reserves to operate for seven months, while standard accounting procedures call for three to six months’ worth of reserves.
While the public meeting ended without any explanation of the $87,000 projected expenditure for an audit, Reed agreed to explain it the next day when SUN staff dropped by her office to request a copy of the audit.
“Just so you know,” Reed began, “it’s a working document. We just received it and we are working on it with the CDE.”
Scott Abbey, the supervisor for CDE’s Field Analysis Support Team, later confirmed in an e-mail, “A draft audit report has been issued to Archuleta County 50 JT School District; which is not public information. The district has 30 days to respond to the draft report before it is finalized. Once the report has been finalized a redacted copy of the final audit report may be requested through CDE.”
Reed went on to explain that every two or three years the CDE conducts routine audits of all departments — transportation, food service and so on. “It’s nothing out of the ordinary; it’s just what they do.”
Reed confirmed that it isn’t like an audit by the IRS; it was not sparked by any suspicious activity. She also explained that this particular audit concerned the transportation department and student counts.
“Part of my understanding,” Reed continued, “was that for many years our alternative high school kids were part of the Archuleta County Education Center. They were responsible for all of the record keeping there. That program has since dissolved, so when we tried to track down records on those kids, we couldn’t find them because they hadn’t …” Reed paused mid-thought and then changed direction, “I don’t know why. They just didn’t exist.”
Reed briefly explained the history of the ACEC, how the school district used to refer students to it, but then those numbers fell once the high school started the Pirate Achievement Center. The ACEC eventually closed due to lack of funds.
“The records were maintained by those folks,” Reed said. “We would say, ‘We need to have attendance records,’ and they were supposed to keep track of it in our system, but they …” Reed paused again and then said, “I don’t know … I’m not pointing fingers at anybody. I don’t know. I wasn’t part of it. All I know is that when we tried to find documentation and records to support the students that had been in that program, we were unable to find them.”
Reed promised the district would make every effort to gather the necessary documentation and file an appeal of the audit within the 30-day time limit.
However, she also added, “As you are probably aware, over the last three or four years, of the funding that was supposed to flow to the district from the state, we have been shorted about five million dollars because of the negative factor, so one of the board members said, ‘Hey, they haven’t given us our money; why should we give them money back?’ It was kind of in jest, ‘We’ll give you yours when you give us ours,’ but there was something behind that. I doubt it will turn out, though.”