Fifteen jobs will be cut from the Halifax County School System’s payroll, and more may be coming as the school system scrambles to fight its way through a financial crisis.

The problem also led Superintendent Geraldine Middleton last week to ask for an advance on the monthly operating allotment the county board of commissioners gives the school system, so the schools could pay their bills and meet payroll.

The financial crisis, it would seem, has two causes: First, a short-term problem of poor budgeting for the present year, and second, a longer-term problem of keeping staff and expenditure levels higher than necessary in the face of declining enrollment.

Keith Hoggard, a public relations official with the school system, explained the immediate problem was simply a case of bad budgeting, although he said it’s not clear where the mistakes were made. Middleton came on board as superintendent in July, long after the current year’s budget was adopted. Interim Superintendent Carolyn Johnson was in charge of the school system during the development of the present budget, after former superintendent William Gilchrist stepped down in June 2006 to accept a position of chancellor with Elizabeth City State University.

Hoggard said shortly after taking the post, Middleton began reviewing the budget and financial records and found some problems. First, he said, she found the school enrollment was going to be down roughly 125 students from the previous year, yet spending cuts had not been put in place to account for the loss of students and the subsequent loss in local and state funding.

Then, he said, as Middleton reviewed the budget the found other problems.

“When she started looking at the books, she realized there had been no increases for the costs this year. … we spent a million dollars on electricity this year, and the cost of electricity is likely to rise, but no expected rise had been included in the budget. … there was no increase for the cost of fuel in the budget.” In short, he said, many items that should have been budgeted at increasing where not.

“She went in and starting putting in expected increases and realized there was no way we had enough money coming in,” he said.

He also said she found that student enrollment in the school system has dropped by more than 900 students over the past five years, yet staffing and programs had by and large remained the same.

“When you’re getting less money, but your payout remains the same, you’re going to hit a problem,” Hoggard said, although he was not sure how the school system had not run into financial problems earlier with the decreasing enrollment. “That’s one of the questions that Ms. Middleton is dealing with, trying to get an answer.”

He said she had identified problems with internal controls that should monitor that sort of thing.

“She’s been working to make sure we have an up to date policy manual to make sure we have the oversight and internal controls to ensure every dollar that is spent is spent as it should be spent,” he said. Despite changes in state and federal law regarding education funding, he said the school system had not updated its policy manual dealing with funding and accounting since the early or mid 1990s.

Middleton’s request from the board of commissioners came as a bit of a surprise to that governing body.

County Administrator Matthew Delk said he and the commissioners were aware the school system had some financial problems, but they did know the magnitude of those problems until the meeting, held Tuesday night, Sept. 18.

“They reflected at one point they needed an advance so they could make payroll this month,” Delk said. “They requested a two-month advance.”

After discussing the request, and hearing a presentation from Middleton on how she intends to curb spending to conform to the present budget, the commissioners opted to grant a one-month advance.

Delk and the commissioners were also somewhat dismayed the school system still has not yet received a final audit for the 2005-2006 fiscal year.

“They’ve not been able to complete an audit, and that’s somewhat worrisome to us,” Delk said. “They haven’t been able to reconcile their accounts.”

Hoggard said the school system received audits that raised no red flags in recent years, even when student enrollment was declining but spending was not, until the 2004-2005 fiscal year. The school system received an audit that was “qualified,” which means the auditing firm found that the school system needed to address some situations, or at least it’s book-keeping methods, but he did not know what, specifically, was there.

The school system changed auditing firms after that, and he said the schools are still working with the new firm on the 2005-2006 audit as well as the 2006-2007 audit.

Among the spending cuts Middleton outlined to the commissioners, according to Hoggard, are the 15 positions being eliminated at the end of October. He declined to release the particular jobs, but said there were no teaching positions included.

Other steps to be taken include charging community groups for the use of school activity buses – those had been available free of charge – charging school-based groups for the use of activity buses, and to implement an energy savings program in all school system buildings.

Hoggard said Middleton indicated there might still be more job cuts to come.

Attempts to reach Middleton directly for comment were unsuccessful, and she did not return telephone messages left in her office.