School board scrambles to cover unexpected costs

Officials have also tapped into reserve fund, prompting questions of financial competence

‘‘There is no question that the demand outstripped our preparedness,” said board member Rosalind Johnson (Dist. 1) of Laurel, who was in charge of organizing the summit at Northwestern High School in Hyattsville. ‘‘I’m very upset about this.”

In addition to the lack of sponsorship money, the larger number of attendees caused costs to increase. The summit had several major expenses, including $23,391 to transport groups to and from the event, $20,440 for catering services and $18,250 to print brochures and other literature.

The County Council is expected to pay $10,000 toward the cost of the summit, slashing the total amount owed by the board from $75,574 to $65,574. Officials said some money could come from donors in the coming weeks, although they weren’t sure how much to expect. The school system received $2,700 in donations for the event.

Superintendent John E. Deasy asked the board to submit signed financial pledges before similar events are organized, a suggestion board members said they plan to implement.

Parents and school activists said the summit funding is the latest in a series of questionable financial moves by board members. Last month, the board unanimously approved a $1.68 billion fiscal 2009 budget that would dip into the school system’s reserve balance, which in recent years had stayed steady at $100 million. The reserve consists of unspent funds from the previous fiscal year. County and school officials said that for several fiscal years in the last decade, no money was left over for the reserve fund. The system has been able to build its reserves since the current school board took office in December 2006.

In the current and next fiscal year, the school system has budgeted to spend $71 million of the reserves to held fund its programs, as the system would not get the money from any funding source.

Prince George’s County Councilman Thomas E. Dernoga (D — Dist. 1) of Laurel has encouraged school officials to spend all of its annual funding, and to leave little or no money in the reserve. The appointed county school board — which was replaced by the elected board in 2006 — accumulated more than $100 million in reserves before members left office, Dernoga said.

‘‘Nonetheless, that didn’t stop them from coming in the next year and asking for a bigger budget even though they weren’t spending the prior year’s budget by a pretty large amount of money,” Dernoga said. ‘‘So it’s actually good at some level that they’re starting to use the money that they’ve been allocated.”

If the school system needs more than the remaining $29 million in reserve funds, Dernoga said school officials could request emergency funding from the county government.

‘‘That’s the normal process,” he said.

Deasy said last month that county officials have reiterated that maintaining a reserve balance of $100 million was excessive.

Deasy said since he took office in May 2006, the county has been ‘‘concerned about the size of the fund balance and an absolute expectation that we not keep a fund balance that large.”

He said the $1.68 billion budget approved by the school board Feb. 28 leaves the ‘‘appropriate amount in each category.”

‘‘We’re in a good situation around that,” Deasy said.

The Government Finance Officers Association, which develops financial policies for local, state and federal governments, suggests budgets include fund balances of between 5 and 15 percent of the operating budget total.

James W. Beall, the county school system’s chief financial officer, said maintaining a fund balance of about 2 percent of the operating budget would suffice, but warned school officials about drawing down from the reserves in coming years.

‘‘It’s probably the minimum that we’d want to go to,” Beall said.

Zalee Harris, a longtime school activist from Temple Hills, said the school board should have questioned Deasy’s budget proposals more thoroughly before making them policy.

‘‘This school board doesn’t know enough about alternatives to [Deasy’s plans] to even question it,” Harris said. ‘‘I’m concerned the board has not done enough of its own research. They’ve put themselves in a position to be scrutinized.”

Robert Braddock, a PTA member at Kenmoor Middle School in Landover and a former budget officer for Washington, D.C., public schools, said using more than two-thirds of the school district’s reserve balance might benefit the school system over the next two years – funding a bevy of new education programs initiated by Deasy and the current board – but could haunt officials in 2010 and beyond.

‘‘To hear that is actually kind of scary as a parent in Prince George’s County,” said Braddock of Cheverly. ‘‘I would be concerned about it because it’s a very short-sighted option.”

Braddock said the Washington school system’s budget office required pledges and donations to be deposited in the school system’s operating budget before officials hosted an event. In Prince George’s, the funding for the summit was not secured before the event, officials said.

‘‘Whoever is handling their contracts is a little bit naïve of the potential pitfalls, and they ended up finding one of those pitfalls,” Braddock said.

E-mail Dennis Carter at dcarter@gazette.net.