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Isle of Wight County Schools’ chief financial officer says a mistake in the school division’s reports to the state caused a half-million-dollar reduction in state funding, and is among the reasons the division is now carrying a deficit.

Superintendent Theo Cramer told the School Board last month that Isle of Wight County Schools ended its 2022-23 school year more than $600,000 in the red, of which $438,506 remained as of Sept. 14.

Cramer in August had blamed the deficit partially on a nearly $945,000 reduction in state funding. School officials had initially attributed the reduction in state funding to a 2% decrease in enrollment from the 5,568 students expected last September.

CFO Larisa Harris, however, told the School Board on Sept. 14 she’d discovered that an error on the division’s part from 2022 was responsible for 60% of that loss.

According to Harris, a school employee, whom Harris did not identify, mistakenly reported to the state on July 15, 2022, that the division would give teachers a 2.5% salary increase during the 2022-23 school year rather than the 5% raise the School Board had approved. As a result, Harris contends the division received a prorated $548,147 rather than the $1.1 million state funding supplement it should have been entitled to for giving the state-mandated 5% raise included in Virginia’s biennial 2022-24 budget.

The Virginia Department of Education did not immediately respond to The Smithfield Times’ request for comments on Harris’s allegation.

Harris and Cramer, at the School Board’s Sept. 14 meeting, continued to blame the deficit on overspending in the school division’s transportation department and substitute teacher pay, coupled with the reduction in state funding.

School Board Chairman John Collick asserted that were it not for the half-million-dollar state funding reduction from the reporting error, the $438,506 deficit likely wouldn’t exist and “we probably wouldn’t be talking about this right now.”

He then called the confluence of the state funding reduction and overspending a “perfect storm.”

 

Transportation costs, by the numbers

The School Board, in early 2022, raised the minimum pay for bus drivers to $20 per hour and the minimum for bus assistants to $15 per hour, planning to fund the raises for the then-remaining six months of the 2021-22 school year with Elementary and Secondary School Emergency Relief, or ESSER, funds the division had received from a federal pandemic relief package known as the American Rescue Plan Act, or ARPA.

Cramer had contended in August that a non-ESSER funding source hadn’t been identified in last year’s budget to continue the raises into the 2022-23 school year. Cramer’s predecessor as superintendent, Jim Thornton, and Harris’s predecessor, Steve Kepnes, have each disputed the allegation.

Harris, at the Sept. 14 meeting, said the division’s transportation department has historically underbudgeted for salaries. At the conclusion of the 2021-22 school year, transportation department salaries had been overspent by roughly $91,000, she said.

Todd Christiansen, the division’s director of support services, said one of the factors that resulted in overspending within the transportation department during the 2022-23 school year was the filling of mechanic positions that had for years stayed vacant. Funding for those positions as a result wasn’t identified in the division’s accounting software, MUNIS, he said.

Rates of pay for field trip and athletic event drivers were also adjusted to match the 2022 rates for regular drivers, Christiansen said.

A chart Harris showed at the Sept. 14 meeting listed $2.4 million as having been budgeted for “pupil transportation – general” salaries in 2022-23, though $2.8 million was spent, leaving the budget category just over $381,500 in the red. Similar overspending occurred in the “special,” “athletic,” “monitors” and “maintenance” pupil transportation budget for an overall $903,380.94 deficit within the department.

Thornton and Supervisor Dick Grice, at the Board of Supervisors’ Aug. 17 meeting, had questioned Cramer’s August assertion that deferring the purchase of our new buses had taken $540,000 off the originally $2.2 million divisionwide deficit, each contending that the half-million-dollar purchase wasn’t included in the adopted 2022-23 budget. Harris, addressing the matter on Sept. 14, said the division stopped including bus purchases in its budget at the conclusion of the 2016-17 school year. Historically, she said, it’s been the division’s practice to use leftover funds during school years that ended in a surplus to fund new buses.

 

Substitute pay, by the numbers

According to Harris’ data, Isle of Wight County Schools budgeted $400,000 for substitutes at the start of the 2021-22 school year but overspent the amount by $79,519, or 119%.

An early draft of the division’s 2022-23 budget had called for $398,808 in funding for substitutes, which was at some point reduced to $231,948, Harris said. The division ended up spending $677,481, leaving the budget line item for substitutes just over $445,000 in the red.

According to Human Resources Director Laura Sullivan, IWCS had 6,140 employee absences during the 2021-22 school year, 69% of which were filled by a substitute. When a substitute can’t be found, the division’s practice is to ask an IWCS teacher to use his or her planning period to cover the vacancy, and pay that teacher extra for the time commitment.

IWCS saw a 10% increase last school year in the number of teacher absences, and a nearly 30% increase in the number of absences filled by a substitute, according to Sullivan.