Tavares, FL (Lake County, FL) Monday, Apr. 21, 2014 by Vance Jochim www.FiscalRangers.com
School Districts in Florida have been fiscally shafted by the Florida Dept. of Education to the tune of $51-million. (FLDOE). Lake County Schools received a surprise cut in budgeted Florida revenues of $916,000.
Note: I will be seeking more information on this, and will post updated to THIS page.
Update Apr. 23, 2014 - Orlando's Channel 9 TV reporter Berndt Petersen picked up this story and interviewed me: http://www.wftv.com/videos/news/video-lake-county-schools-wont-get-expected-1m/vCYKrQ/
This story was also published on the national news service, WatchDogWire here:
and on April 24th, it was published in the Daily Commercial: http://www.dailycommercial.com/news/article_465a42d2-2b3e-5e4d-83a0-f875e09cecdd.html#.U1j_pxlp3_o.facebook
What did happen? How did Lake County get cut $916,000 and all Florida schools get cut $51-million?
Monday night, April 21, 2014, around 5:30 pm, the CFO of the Lake County School District told Lake County School District Board members their CURRENT year budgeted revenues from the State of Florida were being chopped by $916,000 over the next two months, and all 67 Florida School Districts were getting surprise, immediate revenue cuts totaling $51-million.
- The Florida Dept. of Education underestimated 2013-2014 Florida student count by 9230, costing Florida school districts $51-million.
- They don't set aside a reserve in case they underestimate the student attendance for the fiscal year, thus when student counts increased, they just surprised the School Districts with a "re-allocation" of funds per student, dropping the annual per-student payment to school districts by $43.70 (may vary by County). This is after the school districts have budgeted and spent 10 months of costs based upon the earlier budgeted State revenue payments based upon the earlier forecast of student attendance.
Imagine you are a School District in Florida like our local Lake County School District and the Florida State Dept. of Education set their budget starting LAST July to allocate funds per student, allocating you $6513 per student (known as FTE).
Then, after 10 months, they send you a notice on Good Friday (last Friday) telling your CFO "Whoops, we goofed, so we are reducing your next two months of revenue to make up for our budget blunder".
That State of Florida mistake will cost Lake County Schools a budgeted, and mostly spent $916,000 which will be taken from the last two months of budgeted payments to the Lake County School District.
Why isn't the Board of Education taking the cuts, or have reserves to offset the blunder? In contrast, the Lake County school District sets aside reserves when setting their budget to cover fluctuations of student attendance. But, once the fiscal year starts (Last July 1), they depend on promised revenues from the Florida Dept. of Education.
According to Carol MacLeod, CFO of the Lake County School District, this is the first time this type of "mistake" has been used to cut their promised revenues.
The problem is they budgeted, and expected to receive Florida revenue payments each month based on receiving the budgeted $6513 per student. They budgeted wages, utilities, skill coaches, ELL experts and other expenses, and TEN months of this year have been already paid out. Now the State is retroactively slashing their last two months of expected and budgeted revenues by $916,000 to make up their mistake.
Imagine renting a building to the Florida State of Education for $6513 per month, and then after 10 months, they say they made a budget blunder, and they were slashing the cost of THEIR mistake from rent payments to you over the next two months. That is what they did.
During the Board meeting, the discussion also described how the Dept. of Education has now REDUCED the official FTE payments from $6513 (for Lake County) to $6439, a reduction of $43.70. That means the Florida government may use that number for the base when glowing about the upcoming budget increases. The result is they can claim to unquestioning media that they are giving a larger amount to schools that is really NOT true.
Are there no ethics in FLDOE?
Basically, they may be manipulating the FTE levels to claim a bigger increase for next year than really exists.
Taxpayers might question their Florida legislators why this happened, ask for an investigation by the Legislative Audit Dept. and ask why the Dept. of Education did not establish a reserve to cover possible bad estimates of student attendance.
Additionally, why should the School Districts absorb the cut due to bad estimating by the Florida Dept. of Education, who are the same people bringing you Common Core.
Finally, could this all be a con job to move the $51-million to another budget category due to some other larger fiscal blunder?
This stinks, and someone in the FL Dept. of Education needs to be held accountable for a $51-million budget blunder. The shortfall from bad estimating AND lack of a reserve should be taken from their own budget.
As it is, Lake County School District staff have to scramble to find a way to offset the $916,000 shortfall, and that will be discussed at the first Board meeting in MAY (NEXT month).
Vance Jochim
The opinions in this article are my own.
Fact were discussed with LCSD CFO Carol MacLeod after her presentation to the Board. She showed me a printout listing all the shortfalls for all Florida counties.
PS: I am going to ask our legislators to initiate a Auditor General investigation of this issue, and hold the Department accountable. You should ask Gov. Scott and your legislators what they will do to ensure the Dept. of Education is held accountable for their budget blunder, and they, not the School Districts, absorb the cost of the $51-million mistake.
References: Here is the memo on the shortfall given to the Lake County School District Board.
Download T307 Workshop Memo 042114
It, and other items related to the revised FTE counts and shortfalls are attached to their April 21, meeting agenda in item 3.07 ("Budget Update")at:
http://www.boarddocs.com/fla/lake/Board.nsf/goto?open&id=9J8LGX53FA64
The file labeled exhibit A on the above page describes the shortfall in detail.
