At last night’s meeting, Whitley Penn presented the 2022-23 Audit. You can find the presentation here on Instagram on itstony._.boy’s feed. And Whitley Penn’s presentation materials are here.
On a night when the Board considered the elimination of 6 successful schools/programs (KIPP Courage, Panda Path, SPIRAL, Treasure Forest, YES Prep Northbrook Middle, and YES Prep Northbrook High), no Board members asked a single question about the Audit presentation. This is what your elected representatives–your TRUSTEES (trusted to protect your schools, your students, and your hard-earned tax dollars)–should have asked the Superintendent and her staff.
Budgeted Versus Actual
Question 1: It’s great to hear that revenues were higher than expected. You’ve claimed the District has a $35M budget shortfall . . . BUT how can we trust that when your budget was off by $17.3M last year?
Comment 1: Worse still, it seems that budgeting issues are common. We checked the last few audits, which were touted as exemplary work, and here’s what we learned:
- 2023: Actual expenses were $17.3M under budget
- 2022: Actual expenses were $17.0M under budget (11-7-22 audit presentation)
- 2021: Expenses were $11.0M under budget (11-15-21 audit presentation)
- 2020: Expenses were $12.9M under budget (11-16-20 audit presentation)
- 2019: Expenses were $14.3M under budget (11-18-19 audit presentation)
Being under budget is a great thing. Being under budget by $72.5M over 5 years is consistently bad budgeting. But this year, when you’re closing schools and killing programs, how can we trust your budgets?
Question 2: I thought SBISD had a deficit budget (in the red) all year long, how did SBISD end up with $9.5M in revenue greater than expenses?
Comment 2: Looking at those audits, we see that 4 of 5 years revenues were greater than expenses.
- 2023: Revenue > Expenses by $9.5M
- 2022: Revenue > Expenses by $10.4M
- 2021: Expenses > Revenue by $19.6M (ie negative)
- 2019: Revenue > Expenses by $46.8M
- 2020: Revenue > Expenses by $7.2M
Grand total of additional fund balance of taxpayer money created is $34.4M. Which is interestingly the same amount they want to cut this year.
And yet, SBISD’s Board and Superintendent ask you to believe that this year is different, now they really face a $35M deficit. How can we trust them when their budgets are purposefully wrong every year?
Fund Balance
Question 3: This is a graph that consistently shows our fund balance has been 28.2% to 33.7% of our budget? SBISD’s Local Board Policy requires 19%. SBISD insists this year that it must cut $35M while it sits on over $100M. Why does SBISD keep it like this?
Comment 3A: SBISD claims that doing so allows it to maintain a healthy cash flow, but that’s not actually true, at least in this amount. if we think back to difficult years like 2008 and 2011, SBISD was ready to borrow funds like many other districts do for the few months at the beginning of the year when they were waiting for property tax revenues to come in. As a “self-funded district” (quote credit to Board President Earnest), 83% of SBISD revenue comes from the taxpayers (see slide 14 of the Audit Presentation).
Additionally, Board Policy CE(LOCAL), (correction on the floor, it’s policy not an operating procedure) “The level of adequacy for fund balances shall be 19 percent of the current budget for the general fund.”
Comment 3B: Now the Board sets their own policy, and back in the ‘08 crisis, they lowered this threshold to 15%. The Board can change policy and this threshold. And it can do so right now.
Question 4: How much cash does SBISD need on hand to pay its monthly expenses?
Answer 4: Glad you asked. About $34.4M according to the audit. 2 months would be $68.8M. SBISD is holding over $100M of your tax dollars, generated by years of overstated budgets.
Question 5: So where does the $90M fund balance goal (page 9 of 11-27-23 presentation) come from? Why are we making $35M in cuts to get to this $90M fund balance goal?
Answer 5: Well…