Posts published in “Day: February 1, 2008”

By BOBBY HORN JR.
The North Forest ISD, which learned last month that it would be receiving $7.3 million less than it thought in state funds, got another dose of bad news when a state auditor said that it did not have enough money to pay its bills for the remainder of the school year.
Speaking to the board of trustees Walter Davis said that unless “drastic measures” were taken the district would not have enough funds to pay its bills over the next 90 day. Davis is an auditor from the Texas Education Agency (TEA) who was sent to the district to monitor their finances.
The district, however, disagrees. Nakisha Myles, spokesperson for the district said that Davis was exaggerating the situation and that they have the funds to get through the year. “We are putting together our plan which he hope to provide to the public soon,” she said.
Carl Williams, assistant superintendent of finance, said that they have been diverting funds form the construction budget to payroll and other operating costs. This practice raised some questions as to whether this was allowed. While the funds were approved by voters for construction projects, there is no state law which prevents them from being spent in other areas. The district says that when tax revenues come in this month they will be able to repay the construction fund.

According to Interim Superintendent William Jones the TEA is withholding $7.3 million in state funds, saying that it overpaid the district for the 2006-2007. School districts receive funds from the state based on student enrollment. The state says that the school district over-reported its enrollment. Jones admitted that no one at the district had updated the enrollment figures that went to the state. Sources indicate that over the past five years the district had seen an over 3,000-student drop in enrollment.
In most districts when an emergency comes up such as a natural disaster or expected loss of state funds they can turn to their fund balance, which is a type of “rainy day fund.” This is not an option for North Forest. Jones said that overspending and inaccurate budgeting has left the district with a $5.1 million deficit in its fund balance.
In order to make up the shortfall, Jones has asked that each department would have to come up with at least an 11% cut in their budget. How this will affect the approximately 1,400 district employees is yet to be determined. However, it is believed that cutting back services and non-employee related expenses would not be enough to make up the $7.3 million.
Myles said that the board has not set a date to review the recommended budget cuts but that she it expected it to happen soon.
Last month students returned to Forest Brook High School after attending classes at Smiley the first semester while repairs were made at their campus. One suggestion offered by Williams is that consolidating the students into one high school would cut costs. He also favored keeping the students of Hilliard and Tidwell Elementaries combined. The Tidwell campus was closed in October when mold was discovered in the school.
Financial troubles are nothing new to North Forest.
Last year the TEA began an investigation into FEMA funds sent to the district for school repairs. In 2001 $10 million was sent to the district to pay damages caused by Tropical Storm Allison. Later another $13 million was sent to the district. When the district was asked to document how the funds were spent it could not produce adequate records.
During this time the district also used school bonds that were supposed to go for new construction to make the repairs based on the promise that 75% of the money would be reimbursed if documented. The documentation did not come.
In March 2007 the TEA appointed a conservator to the district to oversee its finances. The same month the school board fired Superintendent Dr. James Simpson. The missing documentation occurred before Simpson came to the district.
Simpson’s firing led to a wrongful termination lawsuit being filed against the district. Last month the board voted to rehire Simpson as superintendent.
The district also had unexpected building expenses with the mold remediation at Tidwell and then $1 million in repairs and renovation at Forest Brook High School following last summer’s vandalism. Tidwell Elementary school has also been a target of copper thieves.