Budget errors cut Paso Robles school district reserves nearly in half

A threat made to Paso Robles High School left students and staff sheltering in place on Tuesday while police investigated.
A threat made to Paso Robles High School left students and staff sheltering in place on Tuesday while police investigated.

The Paso Robles Joint Unified School District’s budget reserves have dropped by about half during the past three years, mostly due to an incorrect attendance projection and accounting errors.

School board trustees discussed the state of the district’s finances at a recent meeting, where they received a report on an annual audit conducted by an independent accounting firm.

The audit report and a December summary of the district’s finances showed its reserves — general fund dollars that haven’t been budgeted and are usually saved for economic downturns — dropped from 10.4 percent in 2015 to 5.63 percent by the end of 2017, for a total of $4.3 million.

Although the California Department of Education requires school districts to maintain a 3 percent reserve, Paso Robles board trustees prefer to maintain a 10 percent buffer.

Superintendent Chris Williams and board president Field Gibson said the decline is related to a couple of accounting errors made by the previous superintendent’s administration and an incorrect attendance projection made during the 2016-17 school year.

During the 2013-14 and 2014-15 school years, the district’s food service department didn’t correctly document expenses. To make up for the error, the district — which operates on an annual budget of $60 million to $70 million — paid the state more than $380,000 last year, Williams said. The department will reimburse the general fund over time.

The state also overpaid the district more than than $860,000 during the 2013-14 school year, a mistake that remained on the books for years afterward, according Williams and the December summary.

In addition, the district won’t get about $1 million in projected state funds because it miscalculated its 2016-17 average daily attendance.

Gibson said the two accounting errors were tied to processes put in place by the previous superintendent’s administration. Williams was hired to lead the district in 2014, after Kathy McNamara — who had served as superintendent since 2007 — retired from the position.

“I am concerned, because it just makes you wonder what other processes are not correct,” Gibson said. “Maybe we just have to go back and look at every process that was set up by the prior administration.”

The attendance miscalculation was related to the district’s increasing enrollment, Williams said. According to the average daily attendance numbers reported in the audit, the district has gained about 226 students since 2015. The projected 2018 average daily attendance says 6,696 students will attend district schools.

Williams said the errors will not cause the district to make any reductions to staff or programming, and he noted that they are already making efforts to restore the reserves. He said cost savings over the last month had already pulled the reserves above 6 percent.

The December summary and the audit both project the district’s reserves will grow 1 to 3 percent during the next school year.

Gibson said it’s important to maintain a solid level of reserves to ensure the progress the district has made in recent years isn’t impacted by economic conditions.

“I don’t want to see those things go by the wayside,” he said.

Lindsey Holden: 805-781-7939, @lindseymholden

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