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Archive for Friday, January 25, 2013

Lawrence school district audit shows large cash reserves

January 25, 2013

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The Lawrence school district ended the last fiscal year with $55 million in unencumbered cash reserves, or about 32 percent of its total expenditures, according to an annual audit report that will be presented to the school board Monday night.

Much of that, however, was in restricted, special-purpose funds, including debt service payments, special education and employee health benefits.

Within the general operating fund, the audit shows, the Lawrence district ended the year with $5 million in reserves, or 7.5 percent of expenditures, which is the same level of cash reserves that the Kansas Legislature requires of itself when it sets the state's annual budget.

It also carried over another $6.6 million in a "contingency reserve" fund, the maximum amount allowed under state law.

The audit report will be presented to the Lawrence school board when it meets at 7 p.m. Monday at the district headquarters, 110 McDonald Drive.

School districts in Kansas are often criticized for maintaining large unencumbered cash reserves while, at the same time, lobbying the Legislature for increases in general state aid.

Last year, lawmakers passed a bill allowing districts to transfer money out of certain funds into their general operating funds in order to make up for recent cuts in the base state aid formula.

And a report issued earlier this week by Gov. Sam Brownback's School Efficiency Task Force recommended changing state laws to reduce the number of separate cash reserve accounts that districts can keep and allowing more flexibility to transfer money between them.

Kathy Johnson, the district's finance director, did not respond to requests for comment Friday.

Kansas school officials generally have argued that cash reserves are necessary to meet cash flow requirements and to maintain a good credit rating for when they issue bonds.

Although schools have regular expenses throughout the year, their revenues come at irregular intervals. The bulk of the money they get from local property taxes, for example, comes in two disbursements: one in December and another in June, just before the end of the fiscal year.

In addition, the first state payments in a fiscal year for special education services arrive in October. That means when a fiscal year ends on June 30, districts have to have enough money in their special education fund to pay for at least three months of operation.

Of the $55 million that the Lawrence district carried over on June 30, $11.6 million was in the debt service fund; $9.8 million was in the special education fund; and $7 million was in the health care services reserve fund.

Superintendent Rick Doll explained that the health care fund comes from employee payroll deductions. The money is used to pay health insurance premiums, and the year-end balances are used to defray future premium increases or are rebated to employees.

In December, the district spent down some of that balance by issuing rebates to employees of about $500 each, Doll said.

In other business, the school board vote on approval of next year's middle school course selection forms and high school course description and planning guide.

Beginning this year, the high school guide will be available online, district officials said.

Comments

KSManimal 1 year, 6 months ago

"Superintendent Rick Doll explained that the health care fund comes from employee payroll deductions. The money is used to pay health insurance premiums, and the year-end balances are used to defray future premium increases or are rebated to employees.

In December, the district spent down some of that balance by issuing rebates to employees of about $500 each, Doll said."

Not true, Mr. Doll.

The money in that fund does NOT come from employee payroll deductions. The only health care expense deductions from employee paychecks are those used to pay premiums for family coverage or other employee-paid expenses. No funds are withheld from employees and then retained by the district.

The money in this fund comes from line-items that are budgeted but not spent; and then swept into this account at the end of the year. This fund has grown by anywhere from half a million to over a million per year for several recent years. Look at past budgets, and you will see no decreases in that fund; so it clearly isn't being used to pay anything. In fact, the teachers union was told flat-out "we aren't spending that on teachers" when they inquired about this money during last year's negotiations.

Likewise, this fund has zero to do with the employee rebates. The health insurance company retains funds when payments exceed a certain proportion of claims paid; at which point those funds are used to cover the premiums - meaning at that point the district has a lower bill to pay for employee benefits. That happened for the FIRST TIME EVER this past year, and the employees had to fight in order for that money to come back to them rather than the district pocketing it.

Integrity. Try it some time.

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youngjayhawk 1 year, 6 months ago

'the employees had to fight in order for that money to come back to them rather than the district pocketing it.'

The retirees did not receive their money, the district pocketed it.

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Peter Hancock 1 year, 6 months ago

According to Supt. Doll, the money in that fund may legally be spent for only two purposes: to pay the district's group policy premiums; or be returned in the form of a rebate to the people who paid into it. He says that if the insurance carrier raises premiums from one year to the next, the district can use the fund balance to lessen the impact on the employees. The district may not "pocket" the money - i.e., transfer it to other funds where it would be spent for other purposes.

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KSManimal 1 year, 6 months ago

He's right about what the money can legally be spent on. However, the money in that account is NOT from paycheck deductions. Nor has the district "returned" it to employees. It was never paid to employees to begin with - it's unspent money socked away in one of the few accounts they can legally carry over.

Ask to see the balance sheets for that account for the past six years or so. You might learn some interesting stuff, like how it's grown by millions through end-of-year account sweeps; and never decreased much if at all.

The "rebates" he's referring to were made possible by money that was held by Coventry Insurance, not by the district.

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highschoolmath 1 year, 6 months ago

lets see 55 million divided by 11000 students=$5000 per pupil, 11000 students divided by 1700 school dist. employees= 1 employee per every 6.5 students

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weeslicket 1 year, 6 months ago

the district has about half the number of emplyees you claim (around 900), and not all of them are classroom teachers.

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highschoolmath 1 year, 6 months ago

that's not what their web page states " usd 497 employees nearly 1700 employees making it one of lawrences largest employers"

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booksliveon 1 year, 6 months ago

Maybe you should take reading comprehension highschoolmath...employing 1700 is a number that includes all employees from custodians, cooks and bus drivers to teachers and administrators...

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buffalo63 1 year, 6 months ago

The money shuffle has gone on for years. My Dad was a teacher in the 1950's in another state and it was going on then. Never any money for the people actually interacting with students, but money to spend on two duplicate athletic facilities, administrative offices and so on and so on. Look at the last sentence of the reason for the bond issue. That will tell alot.

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Currahee 1 year, 6 months ago

"We need more money" they said....

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KSManimal 1 year, 6 months ago

OK, Mr. Doll...... let's pretend, like you said, that this mysterious $7 million really is money withheld from paychecks. That makes it teacher's money, doesn't it? How about you just give it back.

That comes to about $8,000 each.

I can almost hear the back pedaling already; because that money ain't from employee payroll deductions.

What kind of person.....in the middle of a slime-storm in Topeka over "payroll deductions" for public employees....would turn around and blame their own money hoarding on their employees? Especially after said employees have been calling out money hoarding for years? That's gonna boost morale, I bet.

Perhaps Mr. Doll would like to chime in here and clear the good names of about 900 teachers before the other readers here have them tarred & feathered.

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jackv444 1 year, 6 months ago

At what point does someone question the poor leadership in this school district?

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estherpester 1 year, 6 months ago

It is horribly inefficient and needs a complete overhaul.

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Cant_have_it_both_ways 1 year, 6 months ago

To make matters worse, the school will not allow us to pay for our own para so my child has a person who knows how to work with him because it is a "conflict of interest" (meaning we will get to much information of what goes on behind closed doors and will sue them even though we have also offered to sign a document stating we will not). ++++++++++++++++++++++ I wonder if this has anything to do with the teachers union?

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KSManimal 1 year, 6 months ago

That has absolutely nothing to do with the teacher's union. The union cannot negotiate for paras, their salaries, contracts, or anything. If I had to guess I'd say it was a liability issue to have someone who isn't a district employee "working" in the school.

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chootspa 1 year, 6 months ago

If the paras were members of the union, they wouldn't be earning minimum wage. That is, assuming the original post was correct on that. I haven't looked it up. I know they don't earn much, though.

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Dan Eyler 1 year, 6 months ago

larry, the truth has been there all along. when someone challenges schools and their unions they call them extemists and tea baggers when in reality they look for the truth. the reason they wont allow you to provide your own para that your willing to pay for is because of the teachers union who dictate all the jobs and positions. To allow you to do what is best for your own child in the public school systems isn't allowed because it will weaken their argument of success. These audits are happening so that people can begin to see the light and they are being fought tooth and nail. We all are victims of the unions, many school boards, and the NEA.

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booksliveon 1 year, 6 months ago

This has nothing to do with unions, you should look at the laws that bind IDEA...the feds also tie a schools hands when it comes to this act (IDEA) and schools & families.

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KSManimal 1 year, 6 months ago

kansasfaithful, you are making stuff up as you go along....as usual. The teacher's union has absolutely zero say in any jobs or positions other than licensed teachers. Para contracts are completely separate, and are established unilaterally by the district.

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booksliveon 1 year, 6 months ago

Then please take your special needs child out of school and educate them at home. The IDEA act, while great in theory has its own set of laws that are breaking the bank for Kansas schools...I'm sorry, but the amount of money schools spend to educate one special needs child is exorbitant.

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KSManimal 1 year, 6 months ago

IDEA is breaking the bank for Kansas (and the other 49 states') schools not because it's a bad idea, but because the folks in Washington who made the law refuse to fund it.

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chootspa 1 year, 6 months ago

Well, we haven't exactly helped things out by cutting education spending in Kansas. While IDEA doesn't fully match what it's supposed to match, it does do some matching. When we cut spending a few years back, we ended up violating "maintenance of effort" and losing some of those matching funds - forever. We do it again under Brownback, and we could lose all of our matching funds, what little they were. We won't lose the unfunded mandate, however, so expect lawsuits.

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chootspa 1 year, 6 months ago

You can spend the money now, or you can spend even more money later. "Special needs" counts for kids with minor speech or reading delays all the way up to severely disabled children. Quite a few of these children will need services in the early grades but will develop past the need once they are out of grade school. Neglect to address a problem early, however, and you're looking at a likely high school dropout and lifelong low to no wage earner who will take more taxpayer money. Address the problem and you've got a lifelong taxpayer that will contribute back to society. That aside, it's just basic human decency to try and educate every child to the best of their ability.

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kuguardgrl13 1 year, 6 months ago

Well said. My brother required speech therapy in elementary school and is now a four-year college grad with honors.

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kuguardgrl13 1 year, 6 months ago

"In addition, the first state payments in a fiscal year for special education services arrive in October. That means when a fiscal year ends on June 30, districts have to have enough money in their special education fund to pay for at least three months of operation."

So you're saying you would rather have six months of the school year funded and three not funded? Such a wonderful parent.

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buffalo63 1 year, 6 months ago

The reason they only have "$6.6 million in a "contingency reserve fund, the maximum amount allowed under state law", is they had to spend the extra $3 million this year that was over the maximum. Now is seems at least one board member is worried enough that some of the bond money should be set aside for some sort of "reserve"!

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Peter Hancock 1 year, 6 months ago

The thing to remember is that fund balances on June 30 of any given year are just a snapshot at a randomly selected point in time. Money flows into those funds, and then out of those funds, at irregular schedules throughout the year. A snapshot on June 30 will look very different from a snapshot on, any other given day of the year. As I tried to point out, schools get a big property tax distribution in June, so that will show up in various balances on June 30. But that's money that has to last until the next big distribution in December. Thus, if you take a snapshot on, say, Nov. 30, just before the next tax distribution comes in, it will look quite different.

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KSManimal 1 year, 6 months ago

Take a snapshot of that "Special Reserve Fund" any day of the year, and let us know what you find. Look to see if you find a few million in paycheck deductions going into that like Mr. Doll said. Let us know about that, too.

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Richard Heckler 1 year, 6 months ago

Why are republicans trying to put PUBLIC EDUCATION out of business?

Do WE want big state government and ALEC to make this decision to make this decision for WE taxpayers? NO

It would seem to me that any cash reserve became an endangered species once the republican party began hacking away at school funding, This has been a battle for at least 15 years.

What is it republicans have against Public Education? They have never been clear on this matter.

Can private schools guarantee a better education than public schools? NO

Do private schools have to accept all students that need a high school diploma? No

If parents wanted to send their children to a private schools are there plenty available? Yes

If parents wanted to send their children to a private parochial schools are they available? Yes

Considering the number of families that enroll their children in public schools would that be an indicator that public schools that public schools are the schools of choice? Yes

Why then is big state government starving OUR public schools of of the tax dollars necessary to keep teachers paid a respectable salary and provide all school supplies? This question deserves an investigation comparable to say the Watergate hearings whereby republicans set up an operation to spy on the democrats when Nixon was in office. IF we want the truth.

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Dan Eyler 1 year, 6 months ago

Why is public education hiding millions of dollars of taxpayer money that you didn't even know about except for an audit? Why does the public schools keep this information from the public eye? why are unions taking dues from teachers pay checks? Why are unions using those dues to promote the very process this audit is pointing out? Why did the unions and the local school board promote, fully support and build new football, baseball, softball and soccor fields with new stadiums and artificial turf spending in excess of 10 million dollars from these funds we are discussing when at the same time the economy was tanking and a democrat governor was cutting funding to public education to control the state budget? They do this because what they do is for the kids and that's all they have to say and most of you buy that argument and its back to business as usual. How dare you even question the motives of those doing the work of our children.

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buffalo63 1 year, 6 months ago

If you are talking about a "teachers union", then you are bias against all unions and very misinformed and uneducated about the "teachers union". The "union" is not taking money from teacher's paychecks. Only the teachers that have asked the District to deduct it have it taken out. The "union" has no say how the school board spends it money, particularly with respect to the athletic fields. The "union" "bargains" with the Board about salaries and working conditions, but that is very limited and becoming more restricted. There needs to be more transparency from the Board and administration about the finances.

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KSManimal 1 year, 6 months ago

The information is public, but you have to seek it out yourself.

The unions aren't "taking" money from teacher's paychecks. Teachers who choose to join their union have the option of using payroll deduction to pay their union dues, and most choose to do that because it is convenient.

The local teachers' union is NOT promoting the process of money-hoarding. In fact, the local union has asked every year for about a half-dozen years for that money to be spent on actually educating children; but the district has refused.

The union did not fully support new football stadiums, etc. As for the long-term expense of those stadiums, etc.; you might want to look at what the district is no longer paying in rent to Haskell for the use of their stadium. You might find the deal is far less costly than you think, and might even save money.

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patkindle 1 year, 6 months ago

hey it is only a few million dollars, plus it is all about the kids away, so lets just join hands and sing kumbaya.

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Richard Heckler 1 year, 6 months ago

A Smart ALEC Threatens Public Education

Coordinated efforts to introduce model legislation aimed at defunding and dismantling public schools is the signature work of this conservative organization.

By Julie Underwood and Julie F. Mead, Phi Delta Kappan

A legislative contagion seemed to sweep across the Midwest during the early months of 2011. First, Wisconsin legislators wanted to strip public employees of the right to bargain. Then, Indiana legislators got into the act. Then, it was Ohio. In each case, Republican governors and Republican-controlled state legislatures had introduced substantially similar bills that sought sweeping changes to each state’s collective bargaining statutes and various school funding provisions.

What was going on? How could elected officials in multiple states suddenly introduce essentially the same legislation?

The answer: The American Legislative Exchange Council (ALEC). Its self-described legislative approach to education reads:

Across the country for the past two decades, education reform efforts have popped up in legislatures at different times in different places. As a result, teachers’ unions have been playing something akin to “whack-a-mole”—you know the game—striking down as many education reform efforts as possible.

Many times, the unions successfully “whack” the “mole,” i.e., the reform legislation. Sometimes, however, they miss. If all the moles pop up at once, there is no way the person with the mallet can get them all. Introduce comprehensive reform packages. (Ladner, LeFevre, & Lips, 2010, p. 108)

ALEC’s own “whack-a-mole” strategy also reveals the group’s ultimate goal. Every gardener who has ever had to deal with a mole knows that the animals undermine and ultimately destroy a garden. ALEC’s positions on various education issues make it clear that the organization seeks to undermine public education by systematically defunding and ultimately destroying public education as we know it.

What is ALEC? http://www.edweek.org/ew/articles/2012/03/01/kappan_underwood.html

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Richard Heckler 1 year, 6 months ago

Milwaukee, however, has more than two decades of reality-based vouchers. The lesson from this heartland city?

Vouchers are a vehicle to funnel tax dollars into private schools. Using the false promise of “choice,” they are an unabashed abandonment of public education and of our hopes for a vibrant democracy.

Barbara Miner has been a reporter, writer, and editor for almost forty years, writing for publications ranging from the New York Times to the Milwaukee Journal.

The former managing editor of Rethinking Schools, she has co-edited numerous books on education, including Selling out Our Schools: Vouchers, Markets, and the Future of Public Education.

Her book Lessons from the Heartland: A Turbulent Half-Century of Public Education in an Iconic American City will be published New Press in January 2013.

http://www.commondreams.org/view/2012/10/13-0

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