Saturday's Internet Edition, May 17, 2008.
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A fund balance, or general current expense fund, is like a savings account, and can be used for any expenses.
General expense funds can be used for anything, according to Schools Finance Officer Deborah Smink. Utilities, salaries that are not covered by state or federal funds, insurance on buildings and automobiles, worker’s compensation, staff development and additional classroom and instructional supplies are paid for out of the general fund.
“There is nothing you can’t use the general fund for, because there are no restrictions on local funds,” Smink said.
An auditor last week warned members of the board of education that the fund was getting too small.
The first element, and the single largest contributing factor to the loss, was state-mandated pay raises, according to Smink.
The last two years, she said, local schools encountered high state-mandated pay raises. In the previous seven to eight years, the raises were generally at or less than two percent. Because the state has instituted a movement to attract teachers to help alleviate the teacher shortage, those pay raises have increased.
In 2005-06, the average increase was 2.24 percent, and the following year, it jumped to over eight percent, Smink said. For 2007-08, the amount is expected to be around five percent.
The problem comes in when the state tells local entities to expect a certain amount, but after the General Assembly has concluded its session, the amount has increased, leaving the locals to scramble to come up with the money, Smink said.
Added to that is the fact the system didn’t get its budget until after school had started, which meant people and programs were already in place, and cuts would have been impossible and unimaginable ... subscribe to the Davie County Enterprise Record, P.O. Box 99, Mocksville, N.C. 27028.