As stated in Fort Cherry School District Policy 612, and
more importantly, PA School Code 609, school districts cannot spend taxpayer money
on expenditures not appropriately allocated for in the budget.
FC
School Policy 612 – Purchases Not Budgeted
states that if a line item from the budget is allocated at $0, a legal transfer
of surplus funds from another line item is necessary.
The board must approve the transfer
according to procedures specified in school code. A legal transfer can occur only
if money is available from another line item of the budget.
“When
funds are not available for a proposed appropriation, a legal transfer from one
class of expenditure to another may be made in the last nine (9) months of the
fiscal year by the Board if it is apparent that the necessary surplus funds do
exist in another appropriation and if the procedures specified in the School
Code are followed.”
What are the procedures specified in school code?
PA School Code Section 609 states that
school districts cannot exceed the amount budgeted in each line item, nor can
the money allocated for a particular line item be used for any other purpose or
transferred without a 2/3 majority board vote.
If a line item is budgeted at $0,
the board must vote to approve a transfer of money from a line item with
surplus funds.
School code also states that no
expenditures can be made that will exceed the amount allocated in the budget.
“The amount of funds in any
annual estimate by any school district, at or before the time of levying the
school taxes, which is set apart or appropriated to any particular item of
expenditure, shall not be used for any other purpose, or transferred, except by
resolution of the board of school directors receiving the affirmative vote of
two-thirds of the members thereof.
No work shall be hired to be done, no materials
purchased, and no contracts made by any board of school directors which will cause
the sums appropriated to specific purposes in the budget to be exceeded.”
Where did the money come from to fund $22,262 worth of
expenditures?
School finance is not
the same as corporate finance. Even if
there is money available elsewhere in the budget, by law, funds cannot be transferred and expended from a zero line
item in the budget unless officially voted on by the board.
The board did not
publicly vote to legally transfer the money for the expenditures, so the board
and the public have no way of knowing exactly where the money came from.
Although the board may be ignorant of the law, the superintendent
and business manager should not.
How should a public vote for budget transfers be handled?
This page from Montour
School District’s March 21, 2013, meeting agenda shows how it should be done:
Why does this matter?
Permitting money to be
spent on items that were not allocated for in the budget takes away the
public’s chance to comment on the expenditures as required by law.
Per FC School Policy
604 and PA School Code 687, the budget is to be available for public inspection
before approval. Because the line items
were $0, the public had no idea that the district planned to spend this money.
Spending money that
was not allocated for in the budget undermines the Board’s responsibility to
manage our taxpayer dollars.
As elected representatives, board members are to model
responsible school governance and leadership.
Board members are duty bound to ensure the fiscal integrity of our
school district.
To ensure the fiscal integrity of the district, the district
needs an independent investigation and forensic audit.
Chris Lauff asked that
a forensic audit be added to the October 21 agenda. The board will vote on it at the October 28
meeting.
Taxpayers need to
encourage all board members to pursue this course of action.
At the meeting, Sroka suggested
floating an additional bond to cover supplemental necessary repairs. An additional bond would incur another tax
increase. Doing so without making sure
our finances are in order through a forensic audit would be a serious
disservice to the taxpayers, students, and staff.
More from the October 21 meeting . . .
On the agenda was a
request from elementary principal Jacoby for $14,300 in district funds for upgrades
to the elementary playground. Sroka said
the money would be pulled from the Capital Projects Fund.
Considering the essential
renovations underway (roof replacement, security upgrades, carpet replacement,
and now the need for air conditioning in both buildings), would it not be wise
to reserve the money in the Capital Projects Fund?
Lauff suggested
that Jacoby find the money within her budget.
It is entirely possible, considering that last year $10,260 was found
within the General Fund for Jacoby’s expenditures that were not approved by the
board (budget pages shown at the end of this post).
Jacoby was not at the meeting, and therefore, not
available to comment.
