Langdon Area School Board along with budget & finance committee review current budget and make changes

The Langdon Area School Board’s budget and finance committee held two meetings on Wednesday, November 13, and on Monday, November 18, 2019. Present during both sessions were LASD Board members Cindy Stremick, Chris Olson, and Tyler Feist; school superintendent Daren Christianson; and business manager Shauna Schneider.

Posted 11/21/19

By Lisa Nowatzki

During these meetings, the committee members were tasked with reviewing the current year’s 2019-2020 budget for areas to reduce spending and to make recommendations to the entire school board for spending cuts aimed at reducing costs and preventing more deficit spending.

As identified by Schneider and Christianson, the cause of the current deficit began with the school year 2016-2017. During this time, the business office began using new, computerized accounting software. Under the new software program, some fixed expenditures such as coaches’ salaries were listed in the program as outgoing expenditures but were not included in the actual budget. In effect, monies were taken from the school’s financial accounts without being placed in or accounted for in the budget.

Christianson, Stremick, and the entire budget and finance committee readily admit that they should have caught the errors sooner and are committed to preventing more such errors by taking a more conservative approach to the budget. However, while contending with new software, new personnel, hundreds of line items spread across multiple accounts and banks, and dealing with various federal, state, and local revenue sources, all related to a nearly $6 million budget, the complexities of the LASD budget become apparent. Though private and state auditing of the budget helps identify potential problems, the LASD school district gets audited by a private account firm every two years instead of annually. Potential problem areas are, therefore, only detected on a biennial basis versus an annual basis.

According to school records, for the 2017-year end, expenditures were $5,334,686.09, and revenues were $5,015,774.18 resulting in a deficit of $318,911.91. For the 2018-year end, expenditures were $5,397,212.70, and revenues were $5,323,522.59 resulting in a deficit of $53,690.11. Finally, expenditures for the 2019-year end were $5,871,531.14 and revenues were $5,643,801.16 resulting in a $227,729.98 deficit.

Before the November 13, 2019 meeting, budget and finance committee members, along with Christianson and Schneider, combed through the budget, examining each line item and looking for areas to cut costs and save money. During the November 13 meeting, the group compared notes and agreed on all the fields to cut spending.

Some of the areas the Board agreed to cut spending include professional development, textbooks, school board stipends, transportation costs, equipment purchases, and site subscriptions. The group also agreed to examine assessments and evaluations for any way to cut current costs. Also, after-school tuition will be terminated to save money. The budget and finance committee also agreed to adopt a five-year goal of building and retaining a surplus of 25% to 30%.

Finally, business manager Schneider told the committee that even with all of the budget cuts and projected year-end surplus, additional funds would be required to pay LASD bills and salaries through January 5, 2020. Schneider also conveyed that the reason additional funds are needed is because the board had to use some of the monies from the LASD savings accounts to make up for the prior year’s deficit.

To prevent using more savings account monies and in an effort not to deplete school bank accounts in their entirety, Schneider recommended borrowing or securing a bond from one of the school’s banks for approximately $1,000,000 to cover bills and salaries through January 2020.

At the end of the meeting, the committee agreed to meet again on Monday, November 18, 2019, before the full LASD Board meeting to discuss and finalized changes to the 2020-year budget and to discuss options for either a bond or a loan for year-end bills and salaries.

During the next budget and finance committee meeting on November 18, 2019, the Board agreed to approve changes to the 2020 budget that will result in approximately $151,000 surplus. Though the revised budget projects a surplus at the end of the year, Superintendent Christianson noted that the school system is required to maintain approximately $50,000 to $60,000 in a Special Reserve fund resulting in a net surplus of $151,000.

In regards to the needed temporary funds, business manager Schneider and board president Stremick also informed other members that a bond would not be necessary to cover year-end bills. Before the November 18, Schneider and Stremick talked with the school system’s bank and an attorney. The result from these conversations was that the school could secure a loan instead of a bond to cover the year-end salaries and bills.

After more examination and with the advice of an attorney, Schneider and Stremick determined that the Board would need to obtain a loan for approximately $500,000 to cover expenses through the beginning of the year, versus the original $1,000,000 proposed by Schneider at the November 13, 2019 meeting.

The budget and finance committee then presented the revised budget and the resolution for temporary funding to the entire LASB at the regular meeting on November 18, 2019, for approval. The Board approved the pursuit of a temporary funding loan with a roll call vote with all members voting for the funding. Also presented for approval were various policy updates, the resignation of the part-time music teacher, and home school letters of intent. The Board also agreed to push back the vote regarding a building fund levy from January until June.

During the superintendent’s report, Christianson recognized the boys’ varsity football team’s state title win and the upcoming girls’ volleyball state championship playoff.

Several reports were given from time spent at the convention, including areas like the legalities involved with in-school and off-premise cyber-bullying and a mentoring program for new school board members.

The meeting was adjourned with the decision to hold the next school board meeting at 7:00 a.m. on December 17.

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