Friday, Oct. 11, 2024 | 2:14 p.m.
Clark County School District officials are admitting that poor communication has aggravated a stressful time as they grapple with budget deficits.
There’s a potential central budget deficit that, as of the most recent estimate, is $10.9 million. Additionally, there are now-corrected district miscalculations in teacher salaries and per-pupil funding that took principals by surprise when they were forced to recast their budgets last month.
“I do not understand how there were not any procedural checks,” School board member Isaac Barron said Thursday. “I’m not understanding how there (wasn’t) anything to trigger an alarm,” for someone to tell Interim Superintendent Brenda Larsen-Mitchell that there might be a problem.
“I acknowledge your concern, I understand your concern,” she replied.
Their exchange, during the first time when school board members and high-level staff could have a public discussion, didn’t explain the mechanics of how mistakes and overspends happened. But they did happen.
“We have to do better,” Larsen-Mitchell said. “We have identified the root causes of not having sufficient process documentation, communication and protocols, and we will do better.”
CCSD’s budget challenges are two-pronged. Though they are being addressed in tandem, they originated in different fiscal years and impact different systems.
Central deficit, possibly
This originated in the 23-24 fiscal year, which ended in June.
Larsen-Mitchell said administrators were generally aware in the spring that funds would be getting “tight,” as they knew of coming raises in the teacher contract settled in December 2023.
They also generally knew of last year’s unanticipated litigation and cybersecurity expenses that would specifically create the potential central budget deficit. For example, the district set aside $30 million for litigation last year but went over by $23 million, she said.
Interim Chief Financial Officer Diane Bartholomew said that the district does an annual budget closeout, where staff analyzes actual revenues and expenses districtwide for the previous fiscal year. The potential central deficit is still being determined.
“It is usual and expected to see adjustments in several areas as actuals are compared to projections,” she said. “In most years the budget is able to absorb any of those differences without concern. This year, as part of the fiscal year 24 closeout process, we have realized some significant differences between what we budgeted and what we saw as actuals.”
The closeout is still underway; it typically runs through mid-October, Larsen-Mitchell said. As staff continues to analyze last year’s inflow and outflow, the ballpark figure for a possible central deficit has dropped from $20 million, to $12 million, to $10.9 million as of Thursday.
“What I’m understanding is that the reason the number is fluctuating is because we are closing out,” board member Irene Bustamante Adams said. “I don’t think that’s what the public understands. As we close out, the number will change.”
Larsen-Mitchell told state superintendent Jhone Ebert — who has formally inquired about CCSD’s budgeting challenges — that last fiscal year’s state budgetary reports are due Nov. 1 and that CCSD will submit them by then. The district will make every effort to absorb any confirmed deficit centrally, using the unassigned central fund balance, she said.
School-level budgets
How much this did or could have impacted schools, in dollar amounts, is not clear.
The initial budget estimates for this year reflected errors in teacher pay and how weighted state funding was to be allocated to “at-risk” students, the district said.
The pay figures included in that initial estimate, opened to principals in January, did not include all of the raises teachers would be due this year. Top administration was not aware of this oversight, which under projected average teacher pay by about $5,700 each, until Sept. 12, Larsen-Mitchell said.
Impacts and responses vary. Schools may have varying levels of carryover, or unspent funds from prior years that they can bank for future use. Bartholomew said schools have a total of about $363 million districtwide in carryover.
District Chief Strategy Officer Kellie Kowal-Paul said the impacts to the current year’s school site-level budgets are being realized now.
“Although it is often publicly being attributed to the potential central budget deficit, that’s really not the source of the challenges at the schools,” she said. “The challenges are a difference in the expectation of what it would cost to pay for positions.”
“In some cases, schools budgeted for an amount of money that they should not have been allocated. They were in some cases overallocated in January. That number was trued up in the fall,” she added. “So they are experiencing that as a budget cut, for sure. But the reality is, those dollars should not have been allocated to them in the first place.”
How schools are choosing to make adjustments is up to the principals and school organizational teams, the teams of staff and parents that weigh in on their individual schools’ operations.
Board member Adam Johnson said the January budget documents “have the opportunity to be incorrect” because at that early point, the information may not be settled.
Language is important, he told Larsen-Mitchell.
“On more than one occasion we’ve heard the term ‘crisis’ in terms of this budget, and that feels hyperbolic given the facts that you just shared.”