It’s becoming all too common, according to school business directors in Gardner and Spring Hill. The school districts are waiting for state aid payments that are sometimes more than 30 days late.
The Gardner-Edgerton and Spring Hill School Districts are awaiting approximately $5 million in delayed state aid. State wide delayed payments total more than $572 million. As of June 21, the state owed the GE district approximately $3.5 million in general state aid, special education payments, and mentor teacher aid. Spring Hill is awaiting approximately $1.5 million of similar state funding.
Eric Hansen, GE business director, said payments have been regularly delayed since about 2007.
“This has actually become the norm,” Hansen said. “We go into June still waiting on payments from May and knowing that our June payments are going to be six to eight weeks late.”
Schools are waiting three different payments as well as funding for KPERS, a school employee retirement program, according to state Deputy Commissioner of Education, Dale Dennis.
“They will get their money,” Dennis said. “But the state can’t do it until the money is in the state treasury.”
The delayed payments aren’t causing problems in the Spring Hill or the GE school district.
“But it could start to create some challenges as we head into the new year,” said Doug Schwinn, SH school business director. “Thankfully we just got significant tax payments from Miami and Johnson County and that’s given us enough money.”
Not all districts are as lucky.
Hansen met with other finance directors across the state at a budget workshop last week.
He said the late payments are putting many schools in a cash flow crunch.
“There are districts across the state having to borrow money to make payroll,” Hansen said. “That’s the predicament some districts are finding themselves in right now.”
The amounts being withhold continue to grow as well as the length of time the districts wait.
“It keeps getting worse,” Schwinn said. “The amounts are getting larger and larger. It’s starting to become a theme. Initially, they would give us half of the payments. Now almost the whole amount is being delayed a month. It’s continued to be more challenging.”
Weathering the payment delays is easier in the summer than at the end of the calendar year in December and into early January. That’s when school coffers typically dip to their lowest points, and cash flow can become more difficult, Schwinn explained.
However, June 30 marks the end of the fiscal year, which makes closing out the books a challenge when payments are delayed during the summer months.
“It’s hard to close out a budget year,” Schwinn said. “We’ve kind of got a few placeholders in the budget. We know what money we’re supposed to have, but that’s the real frustrating part.”
Hansen said the GE District is keeping a watchful eye on cash flow.
“We’ve still got all of our summer payrolls that we have to process,” Hansen said. “We don’t want our teacher’s payments to be delayed, although we do have some flexibility when it comes to paying teachers.”
At USD 231, teachers can opt to have a lump sum paycheck cut for July and August in June. About half of the teachers choose that rather than two monthly checks during those months.
“To make sure they get their payments in the month of June, we’ve got to make sure we’ve got enough in the bank,” Hansen said. “Every district is in the same boat right now. As you get closer to the end of the fiscal year, cash flow becomes tight.”
The trend of late payments to schools is likely to continue, Dennis said.
“Next year, it’s highly likely. It depends on when the jobs come back,” Dennis said. Until then, it’s highly likely there will be some late payments next year.”