Franklin School Board reports $480,000 deficit

Published 9:40 am Friday, October 7, 2016

The Franklin School Board admitted to overspending their operating budget for fiscal year 2016 by approximately $480,000 at Monday’s School Board meeting. Now they plan to ask the Franklin City Council to re-appropriate the funds they had previously requested for fiscal year 2017 capital improvements to balance their report to the Virginia Department of Education, which is due by Oct. 15.

According to Franklin Mayor Frank Rabil, failure to resolve the current budget deficit by the given deadline may negatively impact the City of Franklin’s bond and credit rating, since Franklin’s city council is tasked with funding the school board.

The deficit could also trigger a violation of Virginia state law concerning limitations on expenditures. The Code of Virginia § 22.1-91 states that “no school board shall expend or contract to expend, in any fiscal year, any sum of money in excess of the funds available for school purposes for that fiscal year without the consent of the governing body or bodies appropriating funds to the school board. Any member of a school board or any division superintendent or other school officer violating, causing to be violated or voting to violate any provision of this section shall be guilty of malfeasance in office.”

“It is disappointing because in June of this year right before the end of [the school board’s] fiscal year, which ends on June 30, it was reported that they only spent 92 percent of their budget, and they potentially had a carryover of around $300,000 unspent,” Rabil said. “Come September, they find that they’re $480,000 over; not under, over. You’re talking about a mistake of nearly three quarters of a million dollars. That’s what’s alarming!”

Rabil also mentioned that this will be the second year in a row the school board has come to city council with such a request, stating that last year the board estimated they would be over budget by approximately $170,000.

According to city council member Benny Burgess, who represents Ward Two, the $480,000, though not currently authorized, still came out of the council’s funds since the council and school board share a bank account.

“We might decide to give them their own checking account and then they can’t spend more than we give them [in the future],” Burgess said, discussing possible consequences that could result from city council’s next meeting. “This is pretty serious. It doesn’t happen [to most cities] very often. I have a feeling we will be meeting before the 15th to take care of the shortage, and by the time we meet, I hope we will know what consequences are out there.”

School board representative Bob Holt echoed Rabil’s disappointment in the reported figures, stating that as of June 8, only 84.55 percent of the budget had been spent.

According to Holt, the superintendent’s office’s official explanation for the current deficit is that a new finance employee made a clerical error, but he was surprised that no one caught the mistake earlier.

“To explain to the board that the overage was due to a new finance employee error makes no sense because there are two supervisors above that employee whose jobs are to orient and train new employees, and to monitor the budget and expenditures as well,” Holt said. “Good financial management has to be one of the top priorities of the division. This penalizes the city as a whole since school division shortages must be made up by taking funds from other planned usages.”

According to the City of Franklin School District website, as of May 16 of this year, the district estimated its 2015-16 school year per-pupil expenditures at $16,587, not including facilities, debt service or capital outlay additions. The district currently has approximately 1,300 students enrolled across three schools: S.P. Morton Elementary, J.P. King Jr. Middle, and Franklin High.

Holt also stated that the school board learned of several school division audit issues from a prior Tidewater News article published in late February, even though they were known to the division administration staff in early January.

“As of now, these issues still remain unresolved with city council, and rightly so,” Holt said. “These financial concerns need to be resolved, and they need to be resolved now.”

By press time, all other members of the school board and the superintendent were either unable to be reached or declined to comment.