Texas Education Agency monitor Dr. Monte Geren recommended last month that Cleburne ISD raise its fund balance from $6,831,659 million as of Aug. 31 to $12 million and repeated that request in his most recent monitor report delivered to the school board Monday night.
But that $12 million figure may be pie-in-the-sky wishful thinking, he said Tuesday.
“The board strategy is to stop the bleeding right now for the current school year, and that’s a very realistic approach,” Geren said. “When you find yourself in a hole, the best thing to do is stop digging. Until Cleburne ISD can get its deficit under control, there is no way to start a process of building back the fund balance.
“The first thing to do is make sure you don’t go into a deficit situation this year. You can begin the process of fund balance recovery after that. That’s the logical approach.”
Following recommendations by Superintendent Dr. Ronny Beard, the board has agreed to cuts through job attrition, pay freezes and travel reductions.
“They have those things well in hand,” Geren said, “and Dr. Beard stated he wants to do what he can to cut other areas of the budget so the district doesn’t get into a RIF situation.”
Rio Vista ISD, for instance, declared a reduction in force to cut 11 teaching positions from the payroll. Crowley has cut three administrative positions through its own RIF.
Cleburne ISD appeared headed for relatively prosperous times when the fiscal year began.
Then average daily attendance, the district’s primary funding source, began to decline.
“The way it started, it appeared there would be a modest improvement to the fund balance,” Geren said. “There won’t be now, unless the winds change and blow real hard.”
Cleburne ISD has so far avoided a RIF by cutting payroll through attrition and following the guidelines of a TASB study that shows which areas of the district are overstaffed and which are understaffed.
“I wish there were another way for Cleburne [to balance the budget], but Cleburne is not alone,” Geren said. “Where Cleburne is now is having to reduce costs by a little over $200,000 to [balance the budget]. A lot of districts would trade for that in a minute.”
Like many districts, Cleburne ISD has considered implementing open enrollment — tuition-free transfers — to increase ADA revenue from the state.
Geren believes it’s a viable approach.
“In light of the new financial circumstances, if you can waive tuition and get ADA for transfer students, you can improve your revenue through enrollment,” he said. “You get additional dollars [weighted ADA] for students in special education and some vocational courses.
“Open enrollment is not unwise strategy. It would be unwise not to take advantage of any legal means of increasing revenue at a time like this.”
Geren confirmed in his report that district CFO David Johnson is “closely monitoring the 2009-10 budget to ensure that the projected revenues based upon student enrollment/attendance and local tax collections remain acceptably accurate.
“Lower than anticipated enrollment and declining enrollment as the year progresses is a concern. The CFO continues to study potential adjustments to district expenditures that can be implemented in the event the contingency plans are necessary.
“The CFO is keeping the campus and department administrators informed of the potential for future budget reductions in the current year budget, in the event it becomes necessary to implement the contingency actions to avoid a deficit in the [fiscal year] 2010 budget.”
Cleburne ISD has refunded $10,314 related to federal programs. The issues occurred in 2007-08, before Beard and Johnson joined the district.
“The district has completed its review of the TEA audit [followup] letter for the 2007-08 school year,” Geren wrote, “and has refunded $10,314 related to federal programs, which resulted from deficient documentation primarily related to payroll costs.”
Commenting on the fiscal year 2009 audit report, Geren wrote, “The monitor observed and noted improvements in a number of areas of the audit report related to budgeting, accounting, monitoring and supervision of the budget throughout the fiscal year. There are a number of important additional improvements needed that will achieve the district’s progress in eliminating non-compliance findings.
“The superintendent and CFO’s efforts in the area of policy and procedural development are expected to have a significant positive impact on the 2010 audit report, as will the organizational and personnel changes that have been timely implemented in preparation for the 2009-10 school year.
“The new budgeting procedure that was initiated for planning the 2010 fiscal year budget is a giant step forward in improving the district’s business and financial operations as assessed and reported through the annual independent audit.”
The monitor’s priority issues, according to the report, include “continued and expanded effort by the district to regularly and consistently monitor, test and report on the compliance of the district’s employees with the established compliance standards and performance expectations established by the policies and procedures.”