Published: November 01, 2009 12:50 pm      

Audit will help determine Geren departure

Slightly more than a year after his arrival in the Cleburne ISD, TEA monitor Dr. Monte Geren is closing in on the date for his departure.

His exit speech remains unwritten.

“But we are getting closer to that,” he said this week. “After October, assuming something doesn’t pop up that requires additional time, I will probably cut back to one day a week in the school district plus a day or so for preparing reports I have to do. Since the budget was approved, everything seems to be progressing. The key factor now becomes the audit report for fiscal year 2008-09, which is due about January.

“Once the audit report is in, I’ll get a chance to see how the district has progressed and what issues might remain that are noted by the auditors. If that requires some extra work, I may look into that with the district. That’s the key component in making a decision about when my assignment here is terminated.”

The fiscal year 2008-09 budget was affected by Geren, Superintendent Dr. Ronny Beard and Chief Financial Officer David Johnson, who all arrived within a four-month window in summer and fall of 2008.

“There may be some issues in this audit report,” Geren said, “but there are some things that were put in place early in the [2008]) school year to address some issues related to the [TEA]) investigation. There should be significant improvement in the audit report. That’s a key factor. Is that improvement evident?”

Because of multiple expenditures not originally covered by recent budgets, the fund balance has shrunk to an estimated $7.5 million. Based on recommendations of TEA chief auditor Rita Chase, Cleburne ISD should have a reserve of $12 million, which for Cleburne is three months operating expenses. That’s of concern to Geren.

“Concerned, yes. Panicked, no,” he said. “Keep in mind that’s an estimated fund balance. When all the bills have been paid and adjustments been made, it’s anticipated the fund balance may be as low as $7 million. I have recommended to Mr. Johnson that the district begin development of a plan to address a method for increasing the fund balance.”

That’s easier said than done for school districts in the 21st century.

“I know there was something of a windfall here tied to oil and gas exploration, and the fund balance grew,” Geren said. “That probably contributed to the decision to go ahead with some construction and other expenditures. But when things like oil and gas money go away, and you have the normal operating revenues, it takes a while to rebuild the fund balance. That’s the reason for having a plan. If you don’t plan for it and don’t make it a priority, it’s not likely to happen.”

How critical is it for Cleburne ISD to boost the fund balance soon?

“The fund balance is there like insurance or a savings account for a family,” Geren said. “The best use is a sudden expenditure you had not planned for. Otherwise, you’re going to a bank. The fund balance needs to be rebuilt. It needs to be planned. It needs to be a priority.”

How immediate is the priority?

“In my mind, the $7 million [is adequate] as long as they’re careful about the current budget. But if you’ve had a shortfall in revenue and didn’t adjust expenditures, and you’re going to the fund balance again ... you can’t continue to do that. That’s what causes me concern.

”If something comes up that is unanticipated, you don’t want the fund balance to go lower than [$7 million]. Every day in Texas, there are school districts operating on much smaller, percentage-wise, fund balances. That doesn’t make it good. That doesn’t mean people sleep well at night. But those school districts can function as long as they’re careful.”

Any good business watches every dime that goes out the door. It’s critical for Cleburne ISD to do that now, Geren said.

“Cleburne has to watch expenditures and keep those in line with any adjustments in revenues. If you find that you’re a little bit ahead of the game, with revenues better than anticipated, there’s a propensity to take your eye off the ball. With a $7 million fund balance, Cleburne cannot afford to do that. It’s going to be a multiyear thing to increase that by $5 million.”

Does watching every dime include spending $5 for lunch at a conference instead of $12?

“That’s good common sense,” Geren said. “If you’re a representative of the school district, you need to be thinking in practical terms. But I want to get away from the thought that it’s time to panic. If you want to panic, you can eliminate many things. I don’t want to paint anyone into a corner. We’ve said all along Cleburne needs to be careful about what it budgets and living within that budget. That’s the reason to get a plan together to increase the fund balance.”

If expenditures continue at the present pace and the fund balance in a few years is $2 million, will that be time to panic?

“For reasons related to technology and the indoor practice facility, the fund balance went down $2.8 million [in the last year],” Geren said. “You cannot consistently do that, or you’ll be in panic mode.”