LANGLEY — The South Whidbey School District should trim its budget by $250,000 to $500,000 and tighten its accounting practices, according to a series of recommendations made in an independent audit.
The district has had a hiring freeze on many positions and has cut purchases at the administrative level to save money, said Martin Laster, the district’s superintendent. It is also relying on reserves for what it can’t cut during the school year.
Moss Adams, an Everett accounting firm hired by the school board, found the district’s financial records were "deficient" a year ago and urged the district to take a more conservative approach to its budgets. The audit cost $49,000.
Specifically, the district’s books contained "an excessive amount of errors" and did not closely track the budget with how much it actually was bringing in and spending, the report says.
"The lack of budget tracking resulted in a number of financial issues not being identified that should have been," the report says. "This suggests that while financial problems may have occurred anyway, the same problems would likely have been identified and dealt with earlier."
School board members were caught off guard last summer by the breadth of the district’s financial problems as the district began preparing this year’s budget. The district’s former budget director resigned after the financial problems surfaced last year.
"Much of the responsibility for the district’s financial problems rests clearly on the shoulders of the past business manager, who freely admits that he ‘was in over his head,’ " the report says. "The level of oversight provided over the business manager’s work, however, was also lacking."
"Because the budget is still considered tight, the district is advised to trim the budget wherever possible," the report says.
South Whidbey, a district of 2,250 students, has a $16 million budget for day-to-day operations.
While the district needed to change some financial practices, it also has been hurt by factors outside of its control, he said.
"The district is dealing with declining enrollment and state level cuts and neither of those are going away in the short term," Laster said. "So we have financial challenges to address for some time in the future …"
The Moss Adams report made dozens of findings and recommendations. Among other things, it said:
John Jenft, an Arlington-based consultant who has studied school finance issues for 44 years, said the South Whidbey district already had initiated many of the Moss Adams recommendations before the audit came out.
Jenft, hired for a few weeks last summer when budget problems emerged, said it could take the district a while to recover financially.
"It will take a couple of years," he said. "You don’t do it in one year."
Reporter Eric Stevick: 425-339-3446 or stevick@heraldnet.com.
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