Sumter School Board members are pleased with surplus, say still work to be done

New state law requires district to have at least $10M in reserves

By BRUCE MILLS
bruce@theitem.com
Posted 9/4/18

After finishing fiscal year 2018 on June 30 with a projected net income - or surplus - of $7.8 million, Sumter School Board members and district officials say they're pleased with the financial progress the district has made but emphasize there's …

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Sumter School Board members are pleased with surplus, say still work to be done

New state law requires district to have at least $10M in reserves

Posted

After finishing fiscal year 2018 on June 30 with a projected net income - or surplus - of $7.8 million, Sumter School Board members and district officials say they're pleased with the financial progress the district has made but emphasize there's still work to be done.

That additional work is based on a new state law passed in 2017 by the General Assembly that requires all districts to have one month's worth of expenditures in their general fund as reserves. For Sumter School District, one month's expenditures is at least $10 million.

Trustee Johnny Hilton and others made their comments last week at the board's August work session after new Chief Financial Officer Jennifer Miller presented the preliminary June 30, 2018, financial report.

That report showing the district's estimated $7.8 million surplus for fiscal 2018 had already been made public a couple weeks earlier after Miller initially presented it to the board's advisory Finance Committee on Aug. 9. Last week was the first time she formally presented it to the full board.

Miller referenced the state law in her presentation.

"I know when you hear that number - $7.8 million - some may say, 'Well, great, all our problems are solved now,' but that's not true," Miller said. "There is a state law that mandates your fund balance. It's not something that the finance department has come up or [Interim Superintendent] Dr. Hamm has come up with."

After major financial difficulties and overspending in fiscal 2015 and '16, the district's ending general fund balance was down to $106,449 on June 30, 2016. In those two years, the district operated with a CFO.

With the help of a financial consultant brought on staff in January 2017, the district ended fiscal 2017 with a net income - or surplus - of $779,230 to lift its fund balance to $885,679 as of June 30, 2017.

With the $7.8 million surplus in fiscal 2018, the district's ending general fund balance as of June 30, 2018, is anticipated to be about $8.6 million.

Annual expenditures for a district can be somewhat of a "moving target" because the total is so dependent on personnel staffing, Miller said, but recent years' expenditures would require the district to have in the range of $10 million to $12 million in its reserves to meet the one-month expense threshold.

Hilton, who is the chairman of the Finance Committee, echoed Miller's sentiments.

"Although we have this surplus, we're actually still short of where the state says we're supposed to be," Hilton said. "And a lot of districts have a lot more than the 30-day expenditure requirement. We're still not out of the woods yet. The fund balance is much better than it was, but we're still not completely where we need to be."

Board members Lucille McQuilla and the Rev. Ralph Canty supported Hilton in his assessment but emphasized they are pleased with the 2018 surplus.

"When I see $7.8 million and reflect back on having $100,000, we've come such a long way that we don't need to minimize that," Canty said, "even though it's important that we stress we aren't where we should be yet. Let's not diminish this giant step that we've taken."