- Last Updated on Wednesday, 11 November 2009 18:52
- Published on Wednesday, 11 November 2009 18:52
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The King George Board of Supervisors postponed a decision on a request by the School Board which asked for $470,499.
The request relayed by Superintendent Candace Brown was considered at last Thursday’s meeting on Nov. 5, but put off by supervisors until they can get a complete report on Nov. 17 from the county finance department on the request.
Supervisors also want to know what the School Board would do with the money.
The School Board actually ended up with a surplus of $1,192,001 in unspent funds at the end of fiscal year 2008-2009, which ended June 30.
The School Board had voted to ask for $470,499 at a meeting on Oct. 14.
At last Thursday’s board meeting, Brown asked that the funds be appropriated into the School Board’s current operating budget.
But that’s not exactly the substance of the motion made by School Board member Renee Parker.
Parker’s motion was, “To direct Dr. Brown to request the lottery carryover funds of $470,479 to be appropriated from the Board of Supervisors to be appropriated to a carryover fund.”
There is no such thing as a School Board carryover fund under state law, which provides for specific categories.
If the School Board gets the money in their operating budget, they will have to provide a breakdown into which expenditure categories they want it.
They have a list of items to spend it on and there has also been discussion about using it to give raises or to pay for an employee out-of-pocket health insurance increase for the current fiscal year.
Brown had told the School Board the $470,499 represented unanticipated state lottery funding to the division.
But that is open to debate.
The School Board’s 2008-2009 revenue budget anticipated $578,094 in state lottery funding.
Also, the county, like most localities, has a practice of annually spending state funds first.
That practice has resulted in funds that are unspent by the School Board being local funds, with the ability for the locality to keep them in the county treasury, according to state law.
State law requires that unexpended local funds remain part of the funds of the governing body appropriating the funds. Likewise, the same law requires that unexpended school funds derived from the state revert to the state.
Brown is contending that the funds are state funds because they she accounted for them in that manner in her annual school report required to be sent to the state Department of Education.
She is also saying an exception has been made by the state allowing for unspent state funds to be carried over by School Boards from 2008-2009 to the current year.
But state law also talks about such lottery funds as being only used for specific non-recurring expenditures.
“You can clearly see on our annual school report that those funds were not expended,” Brown told supervisors at last week’s meeting. “They are state lottery funds — in fact I believe you have a copy of that report. And it clearly outlines that exact amount of money as state lottery funds that were not expended.”
Chairman Joe Grzeika said: “I’d like to ask that we have the Finance Department to look into that and give us their accounting of that. I didn’t see that, either. And the other thing is, I’d like to know what the funds are going to be used for. Because if in fact, if you’re correct and I’m wrong, which there’s a 50-50 chance either way. What are you going to use those funds for, because there are very stringent requirements for what they can be used for.”
Brown responded: “No sir. If they’re appropriated into the operating budget, they can be used for any operating cost. If they are put into an escrow account, then they are restricted. But the legislation this year has given school divisions a one-time opportunity to have those carried over into the operating fund and expend them at their will.”
Grzeika said, “I think we’ll bring it back at our next meeting and get a full explanation from Finance and bring in the Code as well, so we all have a clear understanding.”
Supervisor Dale Sisson also said, “I’d like to see where it fell in the prior year’s budget because I don’t remember that being culled out specifically as a line item then.”
Grzeika told Brown, “So, we will get that all pulled together and get a formal presentation and give you an advance copy of what we’re doing.”
The School Board had also been skeptical about whether they had a right to the funds, or whether it was up to supervisors to make the decision to release them or not.
A Sept. 14 memo from Brown’s financial secretary, Annette Thompson, to a Virginia Department of Education (VDOE) official asked for guidance, saying, “If the School Board requests that these funds be carried forward and re-appropriated, can the Board of Supervisors refuse to re-appropriate these funds or must they do so?”
Thompson also asked, “Can you also let me know if the State Dept. of Education assumes that all state funds are spend first and then local funds are used for the remaining expenditures?”
VDOE’s Cecelia Rieb responded, saying, “I’ll answer your second question first. The VA DOE does not have a position on whether state funds are spent first or local. As long as the division meets its local effort and local match requirements, the locality can determine the order in which funds are spent.
“Regarding the re-appropriation of carried forward state funds, the language you quoted from Chapter 781 is clear that “state carry forward funds SHALL be re-appropriated by the local governing body.” If the division does, in fact, have state funds remaining at the end of fiscal year 2009, the Board of Supervisors is obligated by state law to re-appropriate the funds to the School Board.
“Whatever the outcome of your dilemma, please be mindful that your local match requirements are met. Also, please be aware that the carry forward provision for any state funds was a one-time allowance made for fiscal year 2009. There is no language currently that allows for the carry forward of fiscal year 2010 funds into fiscal year 2011.”