In pursuit of accurate financial accountability at Scottsdale Schools

Scottsdale Unified School District Governing Board and district officials met to discuss the budget in May. (photo by Melissa Fittro)

Many aspects of public education evolve and change from year to year — and the budget devised to pay for it is no different for the state of Arizona nor the Scottsdale Unified School District.

Split between two May meetings, the SUSD governing board and a few select district officials discussed a rough image of what financial shape the education entity will be in for the 2017-18 fiscal year during the last weeks of school.

The meetings were held at the Mohave District Annex, 8500 E. Jackrabbit Road.

Beginning in fiscal year 2017-18, SUSD will be calculating its budget based on “current-year funding,” a newly passed method of estimating budget needs and costs by the expected number of students for that year. The current year funding formula began July 1, 2016, but districts considered in decline were granted a one-year grace period.

Prior, the district’s Average Daily Membership was based on the student head count on the 100th school day. Moving forward, the ADM, which Arizona Legislature funding is reliant upon, will be calculated day-to-day.

“Now it’s every day — current day — is our funding,” Superintendent Dr. Denise Birdwell explained to the governing board on May 18. “So every day of a child being enrolled in our system counts.”

During two special meetings Thursday, May 18, and Tuesday, May 24, SUSD Chief Financial Officer Laura Smith presented draft maintenance and operations budget. M&O budget is comprised of items such as employee salary and benefit monies, supplies and fuel.

Governing board member Sandy Kravetz was absent on May 18, while governing board member Kim Hartmann was absent on May 24.

The estimated M&O budget for fiscal year 2017-18, which begins July 1, is estimated to be $156.5 million; a $2.3 million increase from fiscal year 2016-17.

As the hot summer days roll on, and the new school year begins, district officials will be slowly solidifying the budget’s numbers.

The governing board is expected to continue talking about the fiscal year 2018 M&O budget and policy in the coming weeks, and vote on the total $328 million budget at a June 6 meeting.

Governing board members Pam Kirby, on left, and Barbara Perleberg. (photo by Melissa Fittro)

M&O budget

Ms. Smith cited the M&O budget as the district’s biggest pot of money — paying for items such as salaries, benefits, and products consumed by the district.

New to the Scottsdale Unified School District, Ms. Smith joined the district earlier this spring after former CFO, Daniel O’Brien transferred to the business services department. She has experience statewide, Superintendent Dr. Birdwell said, and has witnessed how districts are handling their budgets.

Predictions for Scottsdale Schools show an increase of 18 people, the financial leader said, noting the classroom category saw an increase of 5.3 percent.

“The reason for that is we’ve given teachers an increase,” she said.

The budget has about 20 percent allocated for contingency monies, such as the estimated $1.5 million in the supplies categories.

Contingency money is crucial for this budget, as the district finds its footing on the new funding formula. While Ms. Smith says the district keeps track of all new enrollments and is able to estimate how many students should show up to school, they cannot predict that every student will attend.

“I’m not hoarding cash, but I’m protecting the potential,” Ms. Smith explained May 24.

“What we did in our projections was we had open enrollment, so we had some new students who had never attended Scottsdale Unified School District. So just in case, we’re including them in there but we have to hold those funds because if they don’t come, they’re going to reduce funds. Basically that’s money that’s not acceptable until we have proven enrollment numbers.”

Overall the budget is increasing about 0.7 percent, because they are projecting about a 400-student enrollment increase. Additionally, there is to be about $1 million for teachers added to the classroom spending category.

SUSD has gotten in trouble with the auditor general in recent years for entering budget line items in the wrong categories, but district officials assured the governing board that won’t happen again.

“It’s very clear here what our interest is — making sure that at the end of the day when all the dust settles that our priorities are clear in this budget — and that is the classroom and the students,” SUSD governing board President Barbara Perleberg said.

While the board has spent significant time exploring the future budgets, the money can always be moved around within the budget after it’s approved, Governing Board Vice President Pam Kirby noted during the study session.

“We approve as a board all these papers, with all these dollars but it was basically meaningless because after we approved it, they could move budget dollars around wherever they wanted to,” Ms. Kirby explained.

Dr. Birdwell agreed, saying looking at past year’s budgets doesn’t have a lot of benefit.

“To do this deep dive back you are really working off someone else’s philosophy and how they can move money around,” she explained. “So as we go forward to understand how we’re doing budget going forward and understanding those dollars and for us to keep you up on where money has gone — it’s hard to build consistency off of inconsistency in the past.”

Funding will be calculated by the amount of students enrolled at Scottsdale Unified School District day-to-day. (file photo)

Day to day operation

A new accountability system has been implemented within Scottsdale’s 29 schools, with one person per campus to be expertly trained on registration to ensure no mistakes are made when enrolling and withdrawing students because with the new funding formula, the money follows the student Dr. Birdwell says.

“There has never been a time where her (Dr. McCauley) department and the finance department have had a more important role than what they have today,” Dr. Birdwell said May 18. “Each site must have an appropriately trained registrar. If they mess the numbers up on one site, we lose funding.”

The state funding will be following each student when they enter and leave different districts or schools.

“It’s a new world we live in. That’s why that whole accountability system has been changed for this year because it’s critical,” Dr. Birdwell said. “It’s a day-to-day operation that must be accurate. You’ve got to have checks and balances every single day.”

Big picture

On May 18, the board identified some big-picture ideas, such as talking about what the proper amount of money to conserve within the budget is.

“I would like for us to figure out when the appropriate time to talk about budget balance carry forward — I don’t even know when that is,” Ms. Kirby said. “I get it, we’ve got to pay out vacation or whatever, and that’s kind of your contingency fund to pay those things; that’s great, but I would like for those kinds of conversations to bubble up to this level.”

Superintendent Dr. Denise Birdwell said that is one reason she thought the budget process needed to go through the board, and not be handed off to a committee.

“These are the guiding principals of the conversation that we need to have in a new management team to understand where the board stands; to talk about what is an appropriate carry-forward dollar amount?” Dr. Birdwell said.

“It’s a bigger conversation in budgeting to say ‘OK we have this dollar to take care of these issues, but if an entire air conditioning unit went out on one of our middle schools and the SFB wouldn’t pick it up what fund would we go to?’”

Dr. Birdwell says she doesn’t believe this type of task should be given to a district committee.

“You are the fiscal stewards of the district,” Dr. Birdwell said.

“These are the conversations I need you to have as a board so when Laura and I know when we are making decisions, we understand the philosophy of the governing board.”

The governing board’s next meeting is 1 p.m. on Wednesday, May 31.

Northeast Valley News Services Editor Melissa Fittro can be e-mailed at mfittro@newszap.com or can be followed on Twitter at twitter.com/melissafittro.

You are encouraged to leave relevant comments but engaging in personal attacks, threats, online bullying or commercial spam will not be allowed. All comments should remain within the bounds of fair play and civility. (You can disagree with others courteously, without being disagreeable.) Feel free to express yourself but keep an open mind toward finding value in what others say. To report abuse or spam, click the X in the upper right corner of the comment box.