School Board doubles debt overnight

The Halifax County school board at their board meeting on Monday, Feb 18 they owed the state $1,013,000 twenty four hours later they told the Halifax County Board of Commissioners that the debt was actually $2,161,071.98. 

School Superintendent Geraldine Middleton and Acting School Board Chairman Tyrone Williams used a PowerPoint presentation to outline the district financing for the 2005-2006 and 2006-2007 school years.

Williams said the school board accepted responsibility for the poor fiscal management that led to overspending state funds the past two years, but emphasized that all the overspent funds “went towards the education and betterment of our students.”

The school boards presentation included major findings in the recently completed audit for 2005-2006 and details about actions the district has taken and will take to correct the problems identified in the audit:

* DPI assigned staff to support the operation of the finance department in November.

* The district hired an acting finance officer in November.

* The district hired a new finance officer in February.

* Completed the update of the Financial Procedures Manual.

* Completed the strategic budget planning surveys and community forums.

* Provided training on the Financial Procedures Manual to administrators.

* Monthly financial updates provided to the Board.

* Professional development provided to the finance staff.

* One-on-one meetings with budget managers conducted as needed.

* Three board members attended a two-day training session on legal and finance issues.

* The NC School Boards Association provided a training session to board members and budget managers regarding legal and finance issues.

* The auditing firm of Winston, William, Creech, Evans & Company provided training to board members on understanding audit reports.

* The same auditing firm provided consultation and training with board members and budget managers on the recently completed 2005-2006 audit report.

* The district has maintained regular contact with the local government commission and DPI to provide feedback on progress.

* And HCS staff has worked closely with the county government staff to help resolve issues so that a solution can be worked out.

Middleton informed the board where the additional debt to the state came from.

•           $889,017 identified in the audit must be repaid because some state funds were spent inappropriately.

•           $259,017 identified in the audit must be repaid from the 2004-05 fiscal year.

There seems to be some confusion as to the 2004-2005 debt.  At the time of the audit the then School Board Superintendent Dr. Willie J. Gilchrist maintained the audit was wrong. No one really knew where the difference came from.  The state has still not asked for the money back, but with the recent problems the board it is not sure if the state will seek the money or not.  

The school board not only accepted full responsibility for the situation, they went to the board with ways they could come up with the money to repay the county if necessary.

Middleton said the district has looked at many options for repayment and will continue to do so.

So far, she said, the district can find additional local funding to make up over $2 million in the following ways:

•           $400,000 saved through reducing use of facilities.

•           $400,000 collected with recoup of Leandro lawsuit expenditures.

•           $294,000 collected through Medicaid reimbursement.

•           $250,000 saved through a waiver of penalties and fees.

•           $250,000 saved through reorganization and reduction in staff.

•           $200,000 collected on bonds for public officials.

•           $100,000 collected through bond forfeitures.

•             $74,960 collected by deeding parts of old Enfield Middle School.

•             $30,000 collected from timber sales on school properties.

            The county could either provide a special allocation to the school or a loan.  In either case it would take the board some time to repay the county according to Public Relations Coordinator for Halifax County Schools Keith Hoggard.

            One of the items on the repayment schedule was money collected from the sale of timber on school properties.  When asked about this Hoggard told the Observer that the board owns about 300 acres of land.  This is where they would get the timber.  Hoggard said this would be a low priority since most of the trees served as buffers between the schools and other areas. 

            The school board reinforced what they had revealed to the Observer earlier that state agencies and an independent auditor actively looked for instances of wrong doing in the district’s books and found not a single instance of fraud.

            The problem, Williams indicated, was poor fiscal control procedures that did not balance the books and that allowed several accounts to be overspent.  In some instances money would be spent from the wrong fund.  It would be like spending the money from the library fund for school books. 

            The school board has agreed to review a series of questions that the county commissioners had and return to the commissions with answers at the March meeting.