While I admire and support Mr. Ashbury's keeping a critical eye on the school system and its ever increasing budget, it is important to clarify few things about the issue of the FY 2001 surplus and the request to carryover the money. Here are the facts.
The surplus totals $5,140,094. This amount includes $205,277 of revenues exceeding estimates, which simply means that the school system underestimated revenue sources from local, state and federal support and grants. This means revenue projections were very accurate overall.
The second item is E-Rate revenues of $805,012. This is special federal money provided from a telephone tax. It can only be used for certain technology projects. Because it was a new federal program, it was impossible to predict this amount at the beginning of the year. From here on out, a projection of this revenue source will be in the budget, so this was a one time surplus item.
The next item is salary savings of $807,035. This is money saved because higher paid teachers and administrators retired or resigned during the year, and were replaced with lower paid employees. This amount is also unknown at the beginning of each year, since you cannot force someone to retire.
The next item was $1,169,954 in non-departmental savings. This was money left because some things were not as expensive as anticipated. For example, this was a very warm winter, and it did not snow. Since the budget estimates assumed a typical winter, there was money left over intended to pay for these things.
The final piece is $2,152,816 million in school and department carryover. This was money that each school and department was able to save up during the year specifically for use during the next year. More on that in a minute.
As you can see, having these amounts as a surplus was quite reasonable. Except for the carryover funds, all of it resulted from things that could not be anticipated. The alternative would have been to not use conservative budget estimates, and then ask for more money if it was not enough. That is bad financial management. All of it was also accounted for down to the last dollar. There was no overstatement of needs.
So what did the school system want to use the money for?
$150,000 was intended to build a sound barrier at Urbana High School. The school system was ordered to do this by a judge after neighbors filed a lawsuit because they did not want to hear the school band. That was not expected, but the system had no choice.
$1,000,000 was to be used to make up funds needed in the FY 2002 budget, and $633,460 for the FY 2003 budget. You may recall the school system received 1,200 new students this year. The state funding for new students lags behind one year. Also, Frederick County had estimated and budgeted for about 800 new students. It turns out every growing county in the state underestimated the growth this year. As a result, the system was short any funding for these students. This part of the surplus would help close that funding gap.
$805,012 was to be used for the PeopleSoft technology system. What is PeopleSoft? It is the financial management system put in place by the school system, as well as the community college and other county agencies that replaced the 30 -year-old mainframe system run by the county. Two years ago, the county provided the money to buy the PeopleSoft System. The school system did not have a choice, because the county announced it was turning off the county system (along with the county systems for student information and human resources). As a result, the school system had to start its own system, even though it was denied all the money it asked for and knew it needed to run the system. To be able to provide good financial reports and the accountability people want, you have to have a financial system. The school system did this on the cheap, and this money was to pay for the continued implementation of the system. Remember the E-Rate money noted above? It had to be used for technology. Here is where is was intended to go.
That leaves two other items. The first if $373,283 which provided one day of training for elementary school teachers. As many people have noticed, the teachers are being asked to do more and more. Their salaries have increased, but the workload has increased even more. Over 50% of our teachers are in their first five years of teaching. They need more training. The training costs money. That was where this money was going.
Finally, that brings us to the $2,178,339 million of carryover money. Contrary to some allegations, the school system did not take text book money to buy cars. As many people know, we can not afford to pay for all the needs in every school and department. Even if we could, it is good to impose some budget discipline.
Each school and department has to prioritize its needs. If it can not afford something, it is allowed to save up for more than one year until it has enough money, just as any prudent citizen would do. A school or department is not allowed to forgo some need to save up, it has to find ways to save while still meeting its goals. Some departments need books, some need copy machines, and some do need vans or cars. Go look at the fleet of school vans and see if you think there is a need. Any money that is spent has to be justified by an explanation of how it will help the system meet its goals. That is accountability. It is also good government.
I have worked for the local, state and federal governments. In most government agencies there is indeed a mad rush to spend the budgeted amounts. It is easy to say that good management can stop that, but anyone who has worked in government knows what really works is providing an incentive so that money is carefully spent and the "found" money is used for real needs. Was this news to the commissioners? It was not. This concept was explained to them in the past at joint meetings with the BOE.
The bottom line is there is a reasonable explanation for having the surplus, there was a good explanation of the intended uses, there were no surprises. Does that mean the BOE does not welcome the scrutiny by the Commissioners?
No, the BOE welcomes the scrutiny. We can always do a better job, and we want to work together. We also know there will be differences of opinion about priorities, although I would argue it is the job of the BOE to set those priorities, and not the Commissioners.
Either way, we spend a huge amount of every taxpayers money, and we need to be very careful with it. We just think it is more productive to work together on this than to start accusing each other of mismanagement. I do apologize if the FCPS staff did not adequately explain the situation to the Commissioners. We will work on improving that.