Eric Hansen, Gardner-Edgerton school finance director, is fired up about legislation the Kansas House passed last week. Touted as legislation that will help schools survive through what is likely to be another lean year, the bill would allow districts to use funds designated for programs like bilingual education, vocational education, and drivers ed.
“That will have no impact on our operations. It provides us no relief. It’s merely a façade,” Hansen said.
House Speaker Mike O’Neal, R-Hutchinson, sponsored the bill, which he said would allow districts access to more than $357 million in various funds. Hansen said what appears to be leftover cash at the end of the fiscal year on paper are funds used to survive between July and December each year.
Most districts have a sizeable sum of money when they close out the books at the end of the year, but Hansen said those funds are used to meet obligations at the end of the calendar year.
“Payroll would not be met between November and December,” Hansen said. “Fine go ahead and take those balances away, and then you can help pay for those missed payrolls. The more I think about it, the more bogus I think it is. (O’Neal is) trying to grasp at straws here. He seems to believe there are these silos of money tucked away somewhere. There have already been numerous schools that have informed him that there will be no affect, not one bit. He can throw our name in there as well.”
School cash balances hit a low point each December as districts wait for property tax allotments from the county.
Doug Schwinn, Spring Hill finance director, said USD 230 will finish the fiscal year with approximately $8 million cash on hand.
“It does sound like a lot,” Schwinn said. “But because we don’t get our special education state payment until later on in the year, we have to have money starting off in our special ed fund to make those payments… The state doesn’t give you all the money up front, o you’ve got to maintain cash balances to survive.”
GE will finish the fiscal year with approximately $6.1 million in unencumbered funds. By December, district officials will have used all but $2.1 million of it.
“If you don’t have that balance to begin with, you’re going to have major problems when you get to the end of December,” Hansen said.
One month’s payroll for USD 231 is approximately $2.5 million.
“If the state slips up and misses state aid payments, you will miss payroll,” Hansen said.
In addition to unencumbered cash balances at the end of the fiscal year, many schools, like Gardner-Edgerton, sock money away in contingency reserve funds.
“That is a specific fund that schools utilize to meet rainy days,” Hansen said. “In our case that fund has been exhausted.”
GE’s contingency fund dried up last year as district officials used it to partially fill a budget hole.
“The rain has already come and gone and we’ve already used that money,” Hansen explained.