SCHOOLS: School District Under Tremendous Pressure to Correct Current Deficit
In little more than a month, the Groton-Dunstable Regional School District will be required to certify its budget for fiscal year 2015 (July 2014 to June 2015) and the assessments resulting from that budget will become part of the town's proposed operating budget for fiscal 2015 and voted upon at Annual Town Meeting in April. The School Committee will be under tremendous pressure to meet that deadline because previous budgets were built on faulty salary data which will have to be corrected and adjusted in fiscal 2015.
In the meantime, school administrators have been working frantically to close deficits in the fiscal 2013 and the fiscal 2014 budgets before they can move to certify their proposed fiscal 2015 budget. The School District has closed out the fiscal 2013 deficit by transferring $163,000 from the District's 2013 "Excess and Deficiency" fund to balance that budget. The state Department of Revenue has approved that adjustment and school administrators are now focused on the District's current budget (fiscal 2014) which has a deficit of $464,000.
To close that deficit, the school district has frozen expenditures and laid-off several non-teaching employees. Also under consideration to close that deficit is use of additional revenue which could come from school sources and perhaps town sources. When the school's fiscal 2013 was closed out, the District's Excess and Deficiency Fund was certified at $613,000 by the state. Some of those funds could be used to close the fiscal 2014 budget and the town may consider use of its Stabilization Fund to help close the current deficit.
As school administrators grapple with resolving deficit issues within the fiscal 2014 budget, they are also in the process of preparing the district's fiscal 2015 budget. The School Committee hopes to certify the fiscal 2015 budget sometime in March and Superintendent Tony Bent hopes that measures to close the fiscal 2014 deficit will be resolved by that time. Because incorrect data was used in the fiscal 2013 and the fiscal 2014 budgets, building the fiscal 2015 has been complicated and slowed down and has involved a larger than usual deficit which includes adjusting incorrect salary data.
Currently, the district is proposing a $36 million operating budget for fiscal 2015 which is approximately $2.5 million higher than projected revenue for the District in fiscal 2015. The $2.5 million deficit includes adjusting salary data to correct past faulty salary data and also includes increasing out-of-district tuitions, transportation costs and an effort to restore funds to the District's Excess and Deficiency Fund. To close the projected $2.5 million deficit for fiscal 2015, additional revenue sources may be sought from the town and schools, dramatic cuts in programs in the District and possibly increasing class sizes. Details of efforts to close the projected 2015 deficit will be under discussion in the coming weeks between school and town officials.
Bent noted that the anticipated $2.5 million deficit in the proposed fiscal 2015 budget is a worst case scenario and it could be less. Bent stated, "A budget is not a painting on the wall. It moves." Furthermore, whatever budget is certified by the School Committee for fiscal 2015, the amounts assessed to the towns will be divided between Groton and Dunstable.
At a meeting between school and town officials Jan. 8, efforts were made to clarify the scope of the problem and how it developed. Superintendent Bent said all officials at the meeting supported the situation and focused on resolving the problem. The root cause of the problem apparently developed within the District's accounting practices.
According to the School Committee, prior budgets were built on incorrect salary data that didn't match the correct data being used by an outside payroll vendor to pay employees. While employees were being paid the correct amounts, the district budgets didn't reflect those actual costs. The error was found when the District installed new accounting software and brought payroll services back within the District.