Upshur County Schools to remain on WVDE’s financial watch list another year due to ‘perfect storm’ of fiscal year 2015

However, Dr. Sara Stankus says Upshur County Schools is 'back on track financially'

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BUCKHANNON – The West Virginia Department of Education announced Thursday that eight counties have been removed from the Financial Watch List, which keeps an accounting of local county boards’ general fund balances through the West Virginia Department of Education Office of School Finance.

However, the WVDE also announced eight counties will remain on the Financial Watch List – and Upshur is one of them.

Superintendent of Upshur County Schools Dr. Sara Lewis Stankus said the bottom line is Upshur County is working hard to be removed from the Watch List and is making great strides to assure fiscal responsibility.

“Upshur County was placed on this list because we were into a deficit during FY 15 (fiscal year 2014-2015),” Stankus read from an email sent to her by Upshur County Schools Business Manager George Carver. “We are no longer in a deficit, but our fund balance is still below the levels desired by the Office of School Finance.”

Stankus said the original reason the system fell into the deficit was what Carver called “a perfect storm” – too many downfalls occurred at the same time.

“When we went into the deficit originally, we were over the state aid formula for both professional and service personnel,” she told My Buckhannon Thursday. “So, we had too many service and professional employees. Staffing cuts have been made in recent years to reduce the overages to levels that are funded by sources from the state.”

The 2015 fiscal year school year deficit also stemmed from changes that had been made to the Medicaid billing process, Stankus said.

“In our system, we educate everyone in public school,” Stankus said. “Medicaid allows us to bill for some therapists – their payment was never in full, but a portion of the reimbursement for these services. In 2015, Medicaid had a big reduction, and we went from a reimbursement of $800,000 to $298. That was huge.”

In addition, during 2015, the state of West Virginia reduced the state aid formula mid-year to the Upshur County School System by $160,000 – after budgets were already finalized.

“Right in the middle of the school year, we lost $160,000 that had a huge impact on our budget,” Stankus said. “At the same exact time – and this is why Mr. Carver calls it a perfect storm – local property tax assessed values declined after the passage of the previous excess levy. That reduces our expected revenue from the levy rates.”

The newest facility in the Upshur County School System dates to 1988, and with older buildings come costly repairs.

“We did some major renovations in some of our schools and the School Building Authority gave us some of the funding for that – but not all,” Stankus said. “A lot of this happened at Buckhannon-Upshur Middle School and including heating and cooling issues that had to happen to keep the school open.”

Stankus said when the Upshur County BOE became aware of the severity of the issues, it took action to reduce staff, cut expenditures and maximize revenue sources to put the board back on a sound financial footing.

“We believe the board is back on track financially and we expect to continue our efforts to maintain this fiscally responsible action,” Stankus said. “We have to complete reports each month to the School Office of Finance about our expenditures, and if there is any line item that is in deficit, we tell why. We also have to wait for funding to come in from the state – there is an ebb and a flow in getting our money from some of the sources, and we have to continue to pay the bills and keep paying employees.”

Stankus said she is hopeful Upshur County Schools will be off this list soon.

“I don’t want it (being on the list) for our county. I want us to always be fiscally responsible in what we do,” she said. “As my father said, ‘Live within your means.’ I want to do the best for our community. That is why we are writing a lot of grants, we are seeking out additional funding, and I think we are seeing the benefits of that work. People are willing to give you funding for doing innovative things. I hope to continue to do that.”

During Tuesday’s BOE meeting, Carver said assessed property values had increased by $34 million since the previous year. That means the school system will get about $241,000 in additional tax revenues from the regular levy, which will be offset by a reduction in state aid. However, the excess levy revenue will increase by $124,000, which can be used for the items specified in the levy call

The WVDE announced counties removed from the list Financial Watch List include Boone, Clay, Hampshire, Hardy, Lewis, Pocahontas, Summers and Tucker, according to the WVDE press release.

Removal was prompted primarily by the improvement in the county boards’ unrestricted current general expense fund balances. Another factor considered was the number of personnel paid through local funds, the release states.

“We are encouraged by the effort of each of these counties to resolve the financial issues that were problematic and remind them of the continued due diligence necessary to move forward with sound fiduciary practices,” Dr. Steven Paine, West Virginia Superintendent of Schools, remarked in the release. “Financial stability is more critical now than ever as many of our counties face population shifts and other economic factors.”

In addition to Upshur, Calhoun, Grant, Greenbrier, Pendleton, Randolph and Webster counties will remain on the Watch List for another year. According to the release, Brooke County was placed on the Financial Watch List because of a significant one-year decline in its general current expense fund and the large number of personnel projected to be paid with local funds in the 2019-20 year. The county attributes much of the decline in fund balance to a large, one-time building project expenditure, and not recurring expenses.

The WVDE said it provides county boards with additional support and analysis to assist them in navigating the process and in moving toward financial stability in Thursday’s announcement.