G-FYI™: Reminder from State Superintendent to Schools Boards and Superintendents
Dear West Virginia County Board Members, Superintendents and Chief School Business Officials, As county boards of education work on their budgets for the upcoming school year, I wanted to take this opportunity to stress the importance of making sound financial decisions on behalf of the county boards of education that you represent. During these times of decreasing student enrollment and declining revenue, it is very important that county boards of education make the necessary adjustments to their budgets in order to keep the school system financially solvent.
The West Virginia Department of Education has historically recommended that every county board of education have a general current expense unrestricted fund balance of at least three to five percent of the county’s approved budget. The Government Finance Officers Association (GFOA) recommends a carryover balance of two months of operating revenues or expenditures which equates to a 16.67% carryover balance. As of June 30, 2016, only 10 county boards of education in West Virginia met the national recommended carryover percentage. Without sufficient carryover reserves, county boards of education would be unable to react in the event of an emergency.
As student enrollment declines, county boards of education are funded for fewer positions through the state aid funding formula. It is important that county boards of education monitor their staffing levels to ensure that they are in line with available resources and funding sources. On average, personnel related costs comprise approximately 80% of a county’s overall budget. County boards of education that do not adjust their staffing levels can therefore quickly find themselves in financial distress, as there are very few non-personnel cuts that can be made to absorb declines in revenue. I recognize that eliminating positions is very difficult, as it is never easy to make decisions that will negatively impact the lives of our valued employees. Unfortunately, in our current financial climate, making such difficult decisions has become a necessity for most county boards of education.
As State Superintendent of Schools, I am charged under West Virginia Code §18-9B-7 and §18-9B-8 to review the budgets of county boards of education to ensure that they will maintain the educational program of the county as well as meet the county’s financial obligations. If a budget does not meet the criteria set forth in statute, I have the authority to direct the county board to make certain adjustments to the budget. While I take this charge very seriously, it is my hope that all local county boards of education make these difficult decisions on their own.
Please be reminded that West Virginia Code §11-8-26 indicates that county boards of education should not expend funds in excess of those available. As you have been taught by the West Virginia School Board Association, under West Virginia Code §11-8-29, county board members can be held personally liable for the amount illegally expended and under §11-8-31, county board members can even be held criminally liable for such overspending. While it is rare that these statutory provisions are utilized, the potential consequences for overspending are significant and not to be taken lightly.
My staff in the Office of School Finance stands ready to assist all county boards of education with financial questions. That office already maintains a Financial Watch List where monthly budget to actual analysis is performed for 13 county boards of education that have been identified as being financially at-risk. However, just because a county may not currently be on the Financial Watch List does not mean that a county shouldn’t be closely monitoring their own finances and making the necessary adjustments to their spending. If you have financial questions regarding your county board of education, please do not hesitate to contact Amy Willard, Executive Director of School Finance at 304.558.6300 or at .
Thank you for your commitment to ensuring the financial stability of your county board of education in order to best serve the students of West Virginia.
Sincerely, Steven L Paine, Ed. D. State Superintendent of Schools
~~~ Readers' Comments ~~~
It is about time that Charleston came out with clear language about seriousness of school boards and individuals on them being legally liable for overspending.
Nothing like it went to the public during intervention while the GCBOE was stripped of all its power.
No wonder now why all along some GCBOE members have asked probing questions about finances and they were not answered. More power to those conscientious individuals who tried hard to do their jobs and we support them 100%.
There must be a full accounting of every dollar spent during intervention with no local oversight and no accountability at all for State-appointed superintendents.
We need a complete accounting of spending for the Linn school, the loss of public money at the top of the hill on Arbuckle property, spending at Cedar Creek, unplanned spending at the GCES, the BOE office move to the Minnie Hamilton building, the scandal from the new GCES being built too small, and much more. Citizens have tracked the waste and mismanagement for years and we are outraged.
Unless a full accounting is done for public disclosure another excess levy will never pass in the County although we understand that there will be a major reset on July 1.
Thank you GFP for getting Paine’s letter out to Gilmer County.