School officials grilled over funds

Published 8:31 am Thursday, May 19, 2011

JACKSON — The Northampton County Board of Commissioners has tabled their decision regarding a request from Northampton County Schools to draw down on an emergency fund the commissioners had set aside for the school system.

On Monday, after a lengthy discussion with Assistant Superintendent Phil Matthews and Schools Finance Officer Joe Holloway, the board voted to table the issue until their next meeting to allow more research.

Last June, in a working group meeting between county and school officials, the commissioners agreed to set aside $100,000 in an emergency reserve. The decision came after the school system’s capital outlay allocation from the county was reduced from $445,000 to $345,000.

The commissioners noted that the money would only be there for the schools in an emergency and the commissioners would have to approve the item for which they were drawing down on that fund.

In a letter to County Manager Wayne Jenkins dated May 3 signed by Schools Superintendent Dr. Eric Bracy and Board of Education Chair Bill Little, school officials request the $100,000 to be appropriated to Northampton County Schools for the 2010-2011 fiscal year.

“This request is based on the actual expenditures on roof replacements at Conway Middle School and NCHS-West and the required replacement of the heating boiler at NCHS-East,” the letter states. “The roofing projects were planned expenditures, but the cost exceeded the funds available in ADM and Lottery appropriations by approximately $420,600.”

The letter further explains that while some funds were budgeted to address the heating needs at NCHS-East, the expenditure of $141,500 to replace the entire boiler and supply system was not anticipated.

Matthews said the roof on the freshman academy building at NCHS-East was also replaced.

“The roof on the freshman academy, which we viewed as an emergency because the ceiling tiles fall and hit students in the classroom, that was $84,675,” he said “Add to that the roofing projects that we did at Conway and West, which exceeded what the Lottery and ADM proceeds would pay for. I wouldn’t classify that as an emergency, but it did cause us to hit fund balance.”

He added in total the fund balance took a $385,000 hit.

“We’re requesting the $100,000 to cover the boiler at East and the roof at the freshman academy at East,” Matthews said.

Vice Commission Chair James Hester asked Matthews what the current fund balance was.

Matthews said the capital outlay fund balance was at $263,131. Jenkins, using the school system’s June 2010 audit, calculated that the undesignated general fund balance was around $535,000.

“Do you have any Lottery funds that you can draw down,” Hester asked.

Matthews said the school system does have some Lottery and ADM funds, the minimum amount that the state requires. He added he wasn’t sure of the exact amount.

Jenkins said according to county financial records, $60,759.40 was available in Lottery funds for drawdown and $10,072.94 available in ADM funds.

After further discussion, Jenkins explained the roofs at Conway and West were planned projects going into this fiscal year and funding sources were identified as Lottery and ADM funds. “The costs of those roofs exceeded the total available of those two funds, the difference between what was available and what it cost was taken from (the schools’) fund balance,” he said.

Matthews noted $385,000 was taken from fund balance for all of the projects.

Jenkins noted the provision laid out with the $100,000 emergency fund is that the commissioners would approve the item or items before the money was expended.

“This is coming after the fact,” he said.

“You do remember that Mr. Matthews, those were the guidelines set out for you where the $100,000 is concerned,” said Commissioner Robert Carter.

Matthews said he wasn’t disputing it, but didn’t remember that aspect of the agreement.

Carter referred to Holloway.

“The item that Mr. Jenkins is speaking of, it was thoroughly discussed and at the time, prior to the event, it was not clearly communicated, that’s a gray area there,” Holloway said. “We have had massive needs, fuel as an example, the cost of fuel alone is probably justifiable for a portion of that request.”

Commissioner Virginia Spruill was concerned with the fact that the board’s approval was not sought.

“We’ve always identified that money as emergency money and the agreement was to notify us of it, not after the fact,” she said.

Hester questioned why the $100,000 couldn’t come from the undesignated fund balance.

Matthews explained Northampton County Schools had already paid the $100,000; the request was to be a reimbursement.

“Why not reimburse yourself,” Spruill said.

Holloway said the $100,000 was included on a document sent over to the county about the roofs.

“We indicated that we would have to pay $420,000 from fund balance to make the roofing projects complete,” he said.

Matthews said Holloway was referencing Conway Middle School and West roofing projects, which were planned projects funded in bulk by Lottery and ADM.

He added the $100,000 emergency funds would go back into capital outlay fund balance.

After more discussion, Jenkins suggested that school officials take $64,617 available in schools current year capital outlay, draw down $10,072 of ADM funds and $60,759 in Lottery funds, which total $135,449. He encouraged the draw down of the state funds due to the possibility of those being taken away.

Matthews noted the $64,000 in capital outlay has already been encumbered to go toward the roofing projects. He added the school system has tried to draw down more ADM and Lottery funds, but were required to maintain a balance in those funds.

The commissioners directed Jenkins to research if there had to be a minimum in Lottery and ADM funds.

Hester moved to approve tabling the issue until next meeting and Carter gave a second. The measure passed without objection.