Last week on this blog we proved that the receipt of more than $1 million from the LGC HealthTrust did, in fact, require a public hearing despite the School Board’s claims to the contrary at the special July 16th meeting. (See July 26th post ) Now let’s destroy the other claim made by the School Board at this meeting; namely, that the School Board doesn’t need to vote on overexpenditures.
Here are the School Board Chairman’s exact words from the July 16th meeting, (Time: 2:40:00 – 5:45:00) If you become befuddled, it is because Mrs. Steenson is talking utter nonsense, but please continue reading. Your taxes depend on all of us understanding the sophistry at play here.
The first item I’d like to address is policy DBJ – Transfer of appropriations. I’d like to begin with some prepared words and then open it up to the board.
I’d like to address the issue of variances in the 2013/2014 budget.
First of all I’d like to remind the board and the public that we operate on a bottom line budget. We are given $65 million, give or take, by the taxpayers of our four towns, to run our school district. Some line items are over budget, and some are under budget. It is all legal and ethical.
Policy DBJ, which has come into question by some, requires approval of the school board to transfer funds over $5,000 between object codes.
Policy DBJ does not require school board approval to appropriate or spend more than $5,000 on any one item.
To illustrate this, because I’m not a budget person and I’m gonna assume some of you aren’t either, imagine a ledger sheet with two columns. The left side of the page is the planned budget for every line item and the right side of the sheet is the actual appropriation or money spent for every line item.
A transfer of funds results in a change on the left side of the ledger sheet, the planned expense. A transfer of funds has nothing to do with the right side of the ledger, or what is actually spent.
At the end of our fiscal year it is common to show variances. Some line items are over budget, and some are under budget, as I said before.
If we were to transfer funds as needed for expected expenditures, then we would not show any variances at all at the end of the school year. It is the practice of this district not to transfer funds as needed. The variance that results transparently shows the board and our taxpayers where we overspent and where we underspent. A transfer of funds would have negated that.
We exceed our budget on line items that we’re well aware of, such as the high school modulars the board approved last spring, or line items over which we have limited control, such as utilities, due to the increasing cost of heating oil.
It makes no sense at all to keep moving or transferring funds from code to code to cover such variances.
In summary, the superintendent and business director cannot and do not overspend our bottom line budget, nor do they require board approval to overspend or underspend on any individual line item.
Do any members of the board have any questions or comments?
SEE segments 2:57:00 TO 5: 44:00 AND ESPECIALLY 6:45:00 – 7:00:00
First, some vocabulary. A budget line approved by voters is the APPROPRIATION. “Appropriation” means simply setting aside for a purpose. In order to pay a positive variance in a budget line, a transfer of appropriation must take place (per NH budget law RSA 32:10). Policy DBJ says that when the variance is $5,000 or larger and the money is being moved between object codes, the School Board must approve the transfer. (An object code is a broad budget line identifier as presented to voters at Deliberative.)
Way back in October 2013 when I was on the school budget committee, I asked Mr. Stokinger about transfers of funds. Here is Mr. Stokinger’s response to my question about transfers of money between line items in the budget. Here he states that, by policy, overexpenditures of $5,000 or more must be approved by the school board. It makes perfect sense:
So, Mrs. Steenson, I don’t know “whether you don’t understand or you don’t like it” (as you said to me in the July meeting), but you are wrong and you promulgated your misinformation at a public meeting called to specifically set the record straight. Furthermore, you should have known you were incorrect. Only 5 months before, in February, you voted for a fund transfer from the High School to move funds from a math book account to a math online access fee account.
Here is an excerpt from the school board minutes of February 22, 2014:
A fund transfer was requested from the High School to move funds from a math book account to a math online access fee account to purchase a 6 year license and books for an online program for two different math programs. Motion: Mr. Blair motioned to approve the transfer request of $6,271.04 for the High School online math program. Mr. Bealo seconded. With no further discussion the motion passed by unanimous vote.
Mascola: You don’t normally need our permission to do this.
Collins: Over $5,000… and if it changing object codes, I believe… so that’s why.
Furthermore, on May 22, 2014, SAU employee, Cathy Belcher, circulated to all school board members the following email from Dr. Metzler [emphasis mine]:
May 22, 2014 at 12:56 PM, Belcher, Catherine <Catherine.Belcher@timberlane.net> wrote:
Due to the late cancellation of tonight’s school board meeting I want to inform you that under policy DBJ I will be spending approximately $120k on Guided Reading Libraries curriculum with funds originally budgeted for math curriculum. The math curriculum program change was not adopted by the board in June 2013. Although not adopted in June 2013, these monies were actually budgeted for and approved for spending during the 2013-14 school year. Some of the original funds were expended for math curriculum to support our current program. This literacy need has been identified as this is a top priority by our elementary principals. Again, per policy DBJ, the object code for these two curriculum items are the same, thus it is within my authority to authorize this purchase. Additionally, the deadline for this order is this Friday, May 23rd. Savings to the district for meeting this deadline is $26,221.50. Scholastic Classroom and Community Group indicated the order must be placed no later than May 23rdin order for us to receive this discount. It was my intention to bring this up at our board meeting tonight; however, due to the cancellation this email will now serve as my notice to you. Dr. Earl Metzler
It should be clear by now that Policy DBJ absolutely applies to overexpenditures on budget lines and that the TRSB has abdicated all fiscal oversight over the budget by twisting the interpretation of Policy DBJ at the July 16th meeting so that it is not only meaningless but absurd.
TRSB Policy DBJ
It is the intent of the School Board to limit its spending to the amount specified for each line item. However, the Superintendent is authorized to transfer funds between line items when necessary to achieve school Board policy goals, except that excess funds may not be transferred from the Unemployment Compensation line item. Any transfer of non-grant funds between object codes (expense code) that is $5,000 or more requires School Board approval in advance.
Statutory Reference: RSA 32:10; RSA 282-A:71, III; Per RSA 32:10
For a very detailed refutation of Mrs. Steenson’s “interpretation” of Policy DBJ, see the fabulous work of Cathy Gorman, Timberlane school budget committee member on this issue. She kindly permitted me to reproduce her handout here. It was originally given to the Sandown Board of Selectmen on July 28, 2014.
Ms. Gorman Proves Policy DBJ Applies to All Variences