August 02, 2012The Guilford County Board of Education on Thursday, July 26, approved a $677 million budget without knowing what was in it.
Former Guilford County Schools Chief Financial Officer Sharon Ozment frequently got grief from the Guilford County Board of Commissioners and others for what were called incomprehensible budget presentations. But Ozment, who retired on June 30, was competent and her presentations were generally as clear as the powers that be wanted them to be.
Of course, at budget time every year under Ozment, there was the annual game of where-did-Guilford-County-Schools-hide-tens-of-millions-of-dollars, which gave reporters something to do to stay awake. But a CFO (at least the CFO of a school system) doesn't hide tens of millions without orders from the school superintendent, of whom Ozment outlasted quite a few.
Ozment's bookkeeping itself, however, was usually a model of clarity, and her spreadsheets were not difficult to read for anyone with a head for numbers once their sometimes peculiar budget assumptions were understood.
Oz, as she was universally known in Guilford County Schools, may occasionally have tripped over her tongue when trying to explain her budgets, but you can hardly expect a number-cruncher to also be a performance artist.
Many didn't really notice the clarity of Ozment's spreadsheets until she retired. Since she left, the Guilford County Schools budget seems to have disintegrated, and its presentation to the school board members devolved into gibberish.
It's hard to get financial answers out of Guilford County Schools right now. The departure of Ozment has apparently thrown the Financial Department into chaos.
The budget presentation by new CFO Angie Henry at the school board meeting on July 10 was incomprehensible. And it wasn't a good sign when a call to Guilford County Schools several days before the July 26 meeting revealed that, despite the fact that the North Carolina General Assembly had approved the state budget, the Financial Department didn't know basic Guilford County Schools fiscal numbers.
The numbers the Finance Department couldn't produce included the total amount of the Guilford County Schools budget, the amount of state funding Guilford County Schools was getting and the amount of federal funding it would get. And that was only days before the school board approved its 2012-2013 budget last Thursday.
Ozment had run the Finance Department for years, and decided to retire on fairly short notice. Henry was thrust into the top job with little time to prepare, so first-night jitters were to be expected. But surely, by last Thursday, the Finance Department, Henry and the school board would be on the same page.
No dice. Thursday's presentation was as incomprehensible as the previous one.
Part of the problem is the strange budgetary assumptions on which Guilford County Schools bases its budgets. As school board member Paul Daniels pointed out, citing a The Rhino Times article, Guilford County Schools froze its expected funding in the 2008-2009 school year, and has unilaterally designated any reductions in funding since then as losses to be carried on the books forever. That is based on no known budgetary principle.
Guilford County Schools got $376 million in state funding in 2008-2009, and has carried all state decreases in funding on the books as losses ever since – despite the fact that stepped-up federal spending had more than closed the gap, and that the Guilford County Schools budget was growing every year.
Add to the imaginary $376 million baseline, the standard Guilford County Schools assumption that any money it asks for and doesn't get is a cut, and you've got a seriously backward way of preparing a budget.
Ozment was a master of juggling the backward assumptions. Henry apparently isn't yet.
At last Thursday's meeting, believe it or not, Henry presented the school board with a budget for approval and still didn't know the total amount of the budget.
There were some difficulties in preparing the Guilford County Schools budget this year. First, the mean old Republican-controlled North Carolina General Assembly, which Guilford County Schools had counted on to slash the school system's funding, actually increased its funding by at least $2.48 million.
Then School Superintendent Mo Green asked the county commissioners for enough extra money to push the Guilford County Schools budget up to $688 million – a $28 million increase over the 2011-2012 budget and what would have been the largest year-to-year increase in Guilford County School spending at least since the market crash of 2008. Green didn't get the $28 million in this economy, of course – but in Guilford County Schools budget-speak, that $28 million had to be calculated as a loss, even though it never existed.
That made the "budget recap" documents Henry presented to the school board on July 10 and July 26 incomprehensible. For one thing, the parenthesis usually used to indicate negative numbers in budgets actually meant – the opposite of the crazy stuff we made up at the beginning of the budget season.
Daniels asked Henry for the total budget number to compare with last year's $660 million. Henry didn't know.
After conferring with her colleagues like a crime boss called before a congressional committee conferring with her lawyers, Henry came up with a figure: $677 million.
Guilford County Schools will spend $17 million more this year than last year, according to the budget passed July 26.
Daniels took the school system to task for crying "wolf!" despite an actual increase in state funding. He said, "I think the message that goes out is that our budget is being cut."
Daniels said that because the message that goes out is that the Guilford County Schools budget is being cut. Guilford County Schools leads its budget documents and budget press releases with imaginary cuts; lists imaginary cuts in its printed budget before actual budget numbers, and generally goes out of its way to poor-mouth.
Daniels called a lot of the school system's spending increases, whether justified or not, "self inflicted." He cited matching the 1.5 percent increase the state gave state-paid school system employees for county-paid employees.
Henry said, "I think state statute says that we're almost required to do that."
They are not. State-funded employees are paid on a state salary schedule. Locally funded employees are paid on a locally funded schedule. The school board has chosen to supplement the salaries of employees beyond the state schedule, but it is not required to match state pay raises. The school board has chosen to because of a feared loss of morale and of friction between state- and locally-funded employees.
Daniels said, "We decided to match that, so that's something that I consider self-inflicted."
The school board not only spent $660 million last year, it stashed away $10 million for this year – a prudent move, as the federal stimulus money gravy train was ending, as it had to eventually.
"In my mind, it's inconsistent to say our budget is being cut and, by the way, we're going to put $10 million away for next year," Daniels said. "I think it's prudent to do that."
This year, the budget the school board approved saves $1.4 million for the 2013-2014 fiscal year.
Daniels' critique was the only fundamental criticism about the odd way Guilford County Schools prepares budgets and presents them to the people. A few other school board members asked minor questions about the budget – school board member Darlene Garrett asked whether the schools had enough money for document copying – but in general, the budget sailed past the school board with little discussion.
School board member Ed Price made the motion to approve the budget, which passed 7 to 1. School board members Sandra Alexander, Deena Hayes and Amos Quick were absent.