MMSD Budget Mystery #4 (Disappearing Library Aids) Prompts Changes

After schoolinfosystem.org reported on inconsistencies in the MMSD’s library aids budgeting and possibly poor management of the funds (also called Common School Funds), the MMSD changed budget and accounting practices in October.

In a communication to MMSD School Library Media Specialists, the MMSD’s library coordinator Mark Lea wrote on October 24, 2005:

“On Wednesday, the Superintendent, Art Rainwater informed the building principals of the steps that the District needed to take to satisfy the requirements of the 2004-05 disbursement of the Common School Fund (CSF). In late April of 2005, the District received $675,055 in categorical aid to compensate us for the purchase of school materials purchased during the 2004-205 school year. In 2004-05, the District expended @$382,000 (sic) school library materials, so we were about $293,000 short of fulfilling our obligation for receipt of the categorical aid. Because we did not spend as much as we received in categorical aid, we are required to expend an additional $293,000 this year, or return the difference to DPI.”

In an exchange of e-mails with staff later on the same day, Lea admitted that the accounting changes are “confusing. . . . Most categorical aid is delivered before it is spent. In the case of the Common School Fund, the aid usually arrives in late April when purchasing in most Districts has stopped for the year. ”

“We do not yet know how much aid we will get in April 2006 to compensate us for 2005-2006 purchases,” he continued. “However, we do know that we need to at least cover the amount we received last year in addition to covering as much as possible (and hopefully all) of the current year ($ unknown). In order to make those two goals (cover last year’s shortfall and this year’s aid) possible, it was thought that each school would have to budget and spend at least $13.36 per pupil for school library materials.”

In explaining new accounting procedures in a memo to librarians and principals on November 22, Candie Steffen, Accounting Services, wrote, “. . . we believe this is a positive change in that funds allocated for common school fund eligible purchases will be segregated from the general school formula budget, and as such, will be available for library purchases only.”

In other words, the MMSD previously did not track “common school fund eligible purchases” or funds, but merely dumped them into “the general school formula budget,” where they may or may not have been spent on eligible purchases. At the end of each fiscal year, consequently, the MMSD staff scrambled to see whether they could find eligible purchases to cover the aids received. Some years the staff apparently could uncover sufficient expenditures, but in other years they couldn’t, so the MMSD returned the unspent money to DPI.

The Case of the Disappearing Library Aids fulfilled a vital a watchdog role, which will continue in the sizzling series of continuing MMSD Budget Mysteries.

Posted by Ed Blume at January 5, 2006 5:30 AM
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