|
September, 2003 Volume 14, Issue 2 - District Is Hiding $3 Million: Lay Offs Unnecessary |
 |
 |
 |
By Lantz Simpson and Mitra Moassessi
Would the trustees approve lay offs and section cuts if the District’s reserve was really closer to $4.8 million? Through a series of accounting tricks, the District is hiding $3 million in its adopted budget for fiscal year 2004 to keep that money from showing up in the reserve.
The Districts’s budget (the General Fund) is divided into two parts: unrestricted monies (Fund 01) and restricted monies (Fund 03). One of the tricks is in the carry overs in the restricted Fund 03 from fiscal year 2003 to fiscal year 2004. A carry over is income that was not spent in fiscal year 2003 and shown as income in fiscal year 2004. One example would be in matriculation funds. Unspent funds from fiscal year 2003 in the amount of $284,015 appear in the income carry over matriculation budget line. In an another example, unspent staff development funds of $17,961 were carried over.
The sum of all income carry overs in Fund 03 is approximately $2.3 million. This money could have been available to save the programs in the spring, to greatly reduce section cuts and part-time lay offs, and to prevent classified lay offs this fall.
In previous years, some of this now-hidden money had appeared in the ending balance of Fund 03, but not this year. The remainder was spent in Fund 03, but the expenditure was originally posted in Fund 01 adopted budget and then moved into Fund 03 for the actual budget. These movements are perfectly legal, but the end result was that the Fund 01 reserve went up.
Therefore, in fiscal years when the District wants to appear to be in distress, these expenditures are kept in Fund 01. When it is to the advantage of the District to have a large reserve, these expenditures are posted in Fund 03.
A new Enterprise Fund for Community Services and Contract Education (CS/CE) has been created as a result of changes in the Los Angeles County Department of Education accounting system. The income for fiscal year 2004 from the CS/CE program now goes into this new Fund 50. However, for fiscal year 2003, CS/CE income of $636,409 was removed from Fund 01’s adopted income budget, but the same amount of expenditures were not removed and are still scattered throughout the various line items. This then is another accounting trick to make it appear the District has a lower reserve than it really does.
In addition, in the fiscal year 2003 actual budget, there is under reporting of income in restricted Fund 03 when compared with the official Second Principal Apportionment (P2) figures posted on the Chancellor’s website. The amount is $937,517. Most of this difference is included in the carry overs.
The carry overs of $2.3 million and the missing income from CS/CE adds up to about $3 million. Imagine if this money had been spent to serve students to prevent all the pain and suffering endured so far. Why wasn’t it?
|
