State Board of Education affirms fiscal emergency in Sumter School District

COLUMBIA - In a 10-0 unanimous vote, the South Carolina Board of Education affirmed state Superintendent of Education Molly Spearman's fiscal emergency declaration in Sumter School District on Tuesday afternoon.

With the vote, the state board essentially said Spearman had the right to make the Feb. 27 declaration in the district after the Sumter School District Board of Trustees failed to comply with its own "fiscal caution" recovery plan when it voted to reopen Mayewood Middle School earlier that month.

According to the fiscal practices legislation passed in 2017 by the General Assembly, the state superintendent has the right to declare a fiscal emergency in such a circumstance.

The school district, under the leadership of its nine-member board, was the defense in the hearing. Board/district attorney Andrea White of Columbia-based White and Story LLC presented the argument that with a new financial recovery plan - approved Monday night by the trustees - the district could reopen Mayewood next year and also achieve a state-required one month's operating expenses in its fund balance by June 30, 2020.

In presenting that new plan as evidence at the hearing, the district wanted the state board to endorse it, take the district out of fiscal emergency and place it back on fiscal caution, White said.

What precisely happens next remains to be seen, but the state department isn't looking to take over the district's finance department at this time.

Instead, Spearman wants the district and the school board to accept its forthcoming recommendations to continue its financial recovery plan, which it started two years after overspending its budget by $6.2 million in fiscal year 2016 and draining its general fund balance to $106,449.

After the overspending was revealed in an official audit, a decision was eventually made to close two low-enrollment schools, Mayewood Middle School and F.J. DeLaine Elementary School, to save money by consolidating them into two schools 1.3 miles and 3 miles away, respectively.

According to recent projections, one month's operating expenditures for the district is about $10 million to $12 million.

The district ended fiscal 2018 with a fund balance of about $8.6 million and is expected to approach $10 million by the end of fiscal 2019 this summer.

"This is not a takeover," Spearman said after the hearing. "I have full confidence in the administrative staff, the superintendent and the financial personnel. They are outstanding leaders. I hope that the school board will support them and work with me, and we can come up with a plan that puts the district on the right track. I think that plan was in place."

Spearman added she is open to looking at the issues that were brought up in the new plan to see if there are any amendments the state department needs to make to the original budget. She said the department will provide its financial recommendations to the district and board in a timely fashion.

Spearman said reopening Mayewood Middle next year is not likely to be part of those recommendations.

Four district trustees attended the appeal hearing at the state Department of Education headquarters. Those included board Chairman the Rev. Ralph Canty and Johnny Hilton - two of the three trustees who consistently stood against the majority of the board's decision to reopen the school and the appeal process. Of the six trustees supporting the school's reopening and who voted for the appeal, Brian Alston and Sherril Ray attended. Frank Baker, the Rev. Daryl McGhaney, Barbara Jackson, Matthew "Mac" McLeod and Shawn Ragin were not present.

Initial projections from a couple weeks ago pegged attorney fees for the district in the appeal process to be about $20,000.

About 20 Sumter residents were in attendance at the appeal hearing.