DPI director: State directs school spending, not locals
By Heather Smith
MONROE — The funding trial between Union County and Union County Public Schools continued with testimony about how the N.C. Department of Public Instruction decides how much money each school district receives annually.
Court began Friday with testimony from N.C. Department of Public Instruction Director of School Business Alexis Schauss. UCPS attorney Richard Schwartz had her explain a bar graph of per-pupil funding. Where fiscal year 2009 was almost exclusively paid for with state funds, the graph indicated that federal and local funding made up larger and larger amounts of the total school budget in the following years. Instead of school spending increasing in recent years to keep up with the increase in students, Schwartz noted the amount has risen little.
“The total funding has not kept up with the growth in students,” Schauss said.
In this year’s budget, Union County commissioners approved 89.4 percent of the UCPS request for things falling under the 6000 purpose code series the state uses to categorize costs. She also explained that utility and maintenance costs made up a large portion of the 6000 series costs.
“Can Union County use state money to pay for maintenance and utilities?” Schwartz asked.
“No,” Schauss said.
Her testimony also explained that annual budget planning for the next fiscal year begins in February when DPI statisticians calculate the best estimate of how much each school district needs for the upcoming year.
“There are no funds there. There’s no authority. It is just a document,” Schauss said.
During this step, the state uses estimated student enrollment to determine the number of teachers the district will need. Schauss said local staffing is decided by DPI, not the school district. When the state funds the number of employees it determines is appropriate for the district, the money is not given to the district. The money is assigned for the purpose of paying teachers and administrators.
The average payroll cost of those employees is calculated and added to the estimate to transport and feed the students and provide for any special needs. Schools provide instruction for students who qualify as “exceptional children.” They range from children with mild behavioral problems and learning disabilities to those with profound developmental disabilities, blindness, autism and paralysis. Most have a written curriculum plans.
The estimates, called a planning allotment, also considers any past legislative changes in effect then, though the General Assembly passes several changes affecting school funding later in the spring.
“We run those current year formulas to give a starting point of if formulas continue the same way they have in the past, here is your updated funding number,” Schauss said.
Formulas and funding totals never stay the same year to year, she said. Changes in the economy, county student population, tax collection rates, decisions by the legislature and several other criteria mean school budgets are built from the ground up annually.
This year, DPI calculated UCPS’s average daily membership at 40,797. That qualified them for $208,179,152. But that amount is not what school districts should base their budget planning on, Schauss said. Formula deductions needed to be removed from that total.
The planning allotment is DPI staff’s best guess at funding. No number is solid until the General Assembly passes its budget. This year, it passed and was signed by Gov. Pat McCrory in July. Days later, DPI staff had calculated a budget appropriation for each school district. Still, this amount – called the initial allotment – is not the final number, Schauss said. It is simply the first official numbers.
Student enrollment, the number of students entering charter or virtual schools, transportation costs and a host of other criteria cannot be determined until school starts. For the first ten days of school, the district budget is revised many times by DPI based on data from different districts.
Until this year, school districts had LEA adjustments, mandatory budget reductions to reduce the overall state education budget. The state faced large budget shortfalls in recent past. School officials had to make its costs fit what the state could afford to give them, so DPI staff calculated how much less each school district’s budget must be to comply.
“It was a budget mechanism to take cuts from school districts, but it provided them some flexibility as to where they wanted those cuts,” Schauss said.
Schools could choose to cut teaching assistants, teachers or anything else with a smaller impact on school operations.
Based on this formula, DPI calculated UCPS’s cuts would be about $10,162,182 back in February. That brought the total estimated funding to $198,016,970.
But later in the spring, the General Assembly chose to stop LEA adjustments and mandated where the cuts had to be made based on the average of where school districts cut funding in the past. State funding for classroom teachers, instructional materials and instructional support were reduced for all school districts in the state.
DPI revised UCPS’s planning allotment later in the year to reflect the changes. The new estimated budget appropriation for local schools fell to a total of $193,491,814, Schauss said.
She testified that County Finance Director Jeff Yates contacted DPI allotment division staff to ask about the planning allotment. She explained that Yates’ original calculation for how much schools would receive from the state was wrong because it assumed the LEA reduction was added back onto the estimated total.
Schwartz presented her with a Union County press release from July 31 that stated DPI’s analysis of the new state budget found UCPS would get $5.6 million more than first expected.
“Is this statement accurate? That Union County would see an increase of $5.64 million more than the $198 million figure?” Schwartz said.
“No,” Schauss said.
“Did the Department of Public Instruction ever indicate that in any analysis?” Schwartz said.
“No,” Schauss said.
“Would any such analysis from the Department of Public Instruction have come out of your division?” he asked.
“No,” she said.
“If there was such an analysis, would it have come out of your division?” he asked.
“Absolutely,” she said.
“Is this a true statement or a false statement at the bottom of this county press release with regard to analysis by the Department of Public Instruction indicating that Union County would see an increase of $5.6 million?” he said.
“There was no analysis that showed that,” she said. “It is incorrect.”
Schwartz pointed out the same statement in the Aug. 6 Union Update newsletter produced by the county. Schauss said there was no analysis done by then either, so the county’s statement was still incorrect.
“Now, in opening statements, there was a statement made that Union County Public Schools has 560 administrative personnel not counting those at the school level,” Schwartz said. “Does that sound like its possible from your perspective?”
“No,” Schauss said, laughing. “That’s, uh, no. That would be an enormous number.”
“Does the Department of Public Instruction keep track of central office administrators and their numbers at different school systems?” Schwartz asked.
“We do and we publish that,” Schauss said.
Schwartz presented the court with a screenshot of the UCPS statistical profile found on the DPI website. He asked Schauss to read from the exhibit the number of UCPS administrators employed during the 2012-2013 school year. It was 27, she said, three less than the previous school year.
via DPI director: State directs school spending, not locals | The Enquirer Journal.
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Readers Note: the following document was referred to in the testimony above.
August 6 Union Update
August 6, 2013
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Sign up to receive the Union County Public Library’s monthly program guide via your email by contacting Shelley Fearn, Reader’s Services Librarian, at
Featured Library Programs
Sunday, August 11
Deputy Mark Helms of the
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Adult Tutors Needed
Take the first step by attending Literacy Council 101 on one of these dates:
Tuesday, Aug. 13
6 p.m. – 8 p.m.
Tuesday, Sept. 9
6 p.m. – 8 p.m.
Tuesday, Oct. 22
6 p.m. – 8 p.m.
For more information, contact
the Literacy Council of Union County at 704-226-1425 or
Open House/Ask a Master Gardener
Saturday, August 17
8:30 a.m. – 10:30 a.m.
Union County Ag.Center
Presson Road in Monroe
Union County Cooperative Extension Master Gardeners are beginning a series of Open House/Ask a Master Gardener programs that will take place on the third Saturday of each month.
Bring your questions and come see what we’re doing in the gardens. If you have questions, email firstname.lastname@example.org.
Union County Public Schools Failed
to Resolve Budget Dispute
On June 17, the Union County Board of Commissioners adopted an FY 2014 budget that provided an additional $1.47 million in operating
resources and $3 million of capital funding as part of a six-year $18 million schools capital program. In FY 2014, the total county cost for Union County Public Schools is $133 million, representing 56.9 percent of the county general fund budget.
“We believe the adopted budget represents an affordable, fiscally
sustainable financial plan for the residents of Union County,” said Chairman Jerry Simpson. “Our residents and families cannot afford tax increases; this recession has had a significant negative impact.”
The school board contends that the $82.26 million allocated for operating expenses is insufficient to provide for a free public education. The parties completed the legally prescribed mediation process today without resolution.
As part of the mediation process, the school board proposed a funding plan that would provide an additional $1.9 million over three years for operation, in addition to the forecasted increases based on the existing funding formula. The proposal also requested an additional $26 million for capital over three years from FY 2014 to FY 2016.
The fiscal impact of the school board’s proposal generated an estimated cumulative deficit of $38.5 million over three years. To offset this request, by FY 2016, there would need to be a 10 percent tax rate increase, making the estimated effective tax rate 86.59 cents.
As of June 13, the county had $447.4 million of outstanding UCPS related debt.
“The school board’s proposal is not financially sustainable,” said Union County Manager Cindy Coto.
During the mediation process, the North Carolina General Assembly
adopted the state budget. Analysis by the North Carolina Department of Public Instruction indicates that as part of the budgetary changes from the state’s adopted budget, UCPS will see an increase of $5.64 million more than what was originally planned for in the UCPS proposed budget.
During the mediation process, the county was forced to sue UCPS to gain access to public financial records. The records lawsuit remains pending.
Additionally, a review of records provided thus far identified concerns in the UCPS budget proposal and financial practices:
1. Although in FY 2011-12 salaries and benefits represented 59
percent of the UCPS budget, county staff was advised that no
personnel rosters or worksheets exist to determine the cost of
2. Although the proposed FY 2014 UCPS budget is $334 million, no
detailed budget work papers exist.
3. Although the county was advised that the central administration staff do not receive compensation beyond base salary and beyond the doctoral supplements, the Charlotte Observer’s website reports that the administrative cabinet, consisting of nine senior management
staff receive in excess of $169,000 in additional compensation.
4. Although the county was advised that the school board had not
requested additional staff in several budget years, from FY 2012 to
FY 2013, the UCPS web site represents that the number of
employees grew by 21.79 percent, or 971 positions.
A. 637 licensed and 334 non-licensed
B. During this same time period, enrollment grew by 1.48
percent. For every new student UCPS received, they added
1.62 new employees.
5. During FY 2013, the school board received a net of $12.8 million
increase in funding from the originally adopted budget.
6. From FY 2008 to FY 2012, on average funding for the support and
administration grew by more than twice the rate than local funding
Given the adopted county funding, adjustments in areas of the school
board’s budget that appears to be over inflated, increased state budget funding, and the UCPS local fund balance, the school board’s proposed budget has a projected surplus of $2.92 million, in FY 2014, over and above its needs.
“It’s is my hope that with a projected surplus of $2.92 million in 2014, that the school board would not move forward with suing the residents of Union County for more money,” said Chairman Jerry Simpson.
Following the end of mediation, the school board decided to sue the
residents of Union County for additional funding beyond the projected