TEA to oversee E-E school district finances

EDCOUCH -- An outside monitor will oversee finances for the cash-strapped Edcouch-Elsa school district starting next month, the Texas Education Agency said Wednesday.

The state oversight organization assigned a financial conservator one year after an audit revealed a dwindling fund balance, excessive spending and questionable budgeting practices within the school system.

The move is only the latest setback for the district, which took out a $3.5 million loan this summer just to cover its operating expenses until annual state funding arrived.

"The district's financial position is of great concern to the TEA," Education Commissioner Robert Scott wrote in an Oct. 1 letter announcing the conservator's appointment.

District officials welcomed the help Wednesday but said in a dark economic climate and time of declining enrollment they are already doing all they can to dig themselves out of a financial hole.

"If this is going to turn the district around, we welcome it," school board President Juan Jose Ybarra Jr. said. "But we've already done wonders with the very little we do have."

STATE OVERSIGHT

The designated conservator, Fred Liner, a former superintendent for the Fort Hancock school system outside El Paso, is set to arrive in the Edcouch-Elsa district Nov. 18. He is tasked with advising school board trustees on budgeting and spending choices but will have the authority to override their decisions should he deem it necessary.

TEA spokeswoman Suzanne Marchman described the appointment as a "serious" step but not the most severe action her agency could have taken. The organization could have completely taken over the district's books, but it wanted to give the school board a chance to turn itself around first, she said.

"In some cases, this is a preventative measure to stop the district from slipping into a deeper hole," she said. "In other cases, it's meant to correct patterns we're seeing with the district."

The district's 2005-06 fiscal year audit uncovered a shocking lack of cash reserves, excessive staff hiring, and problems tracking school district property.

The district has struggled to return to the black since then, making only halting progress so far.

SPENDING IRREGULARITIES

Since the troubling 2005-06 report, the school system has undergone a second audit with slightly improved results. But the district's cash reserves still remain woefully depleted.

Although district Superintendent Michael Sandroussi could not provide the current fund balance Wednesday, TEA reported the district's reserves at $477,000 as of April 18. School officials have previously estimated it costs $5 million a month to run the district.

"We're in bad shape - I'll be honest," Sandroussi said. "But we've been in worse before."

In a $64.4 million annual budget approved in August, school board trustees agreed to implement a hiring freeze, cut back on school bus routes and eliminate classes with fewer than 10 students enrolled.

But they failed to accept Sandroussi's recommendations to evaluate custodial, security and maintenance staffing levels and consider layoffs and salary caps - even though the district has previously come under fire for $1.3 million in unbudgeted spending for temporary and part-time workers.

The new budget also includes $3 million in estimated revenue from a proposed measure to increase the district's property tax rate by 13 cents per $100 of appraised valuation. Voters are set to vote on that increase Nov. 4.

ONGOING PROBLEMS

But recent efforts to pinch pennies have been derailed by circumstances outside the district's control, Sandroussi said.

Hurricane Dolly, which devastated the Delta region earlier this year, has left 10 buildings closed more than two months into the school year. Repairs could cost millions of dollars.

The declining state of the national economy is also having an effect. The costs of fuel, food and utilities have all increased since the 2008-09 budget was passed.

Should Delta voters turn down the property tax increase, the district will have to revisit its entire budget, Sandroussi said.

The TEA estimated Wednesday that the financial conservator will remain with the district for at least three to six months.

"We've had a lot of good success turning districts around," said Ron Rowell, the agency's governance director. "In the long run, the district will be healthier and can get back up on its feet."

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Jeremy Roebuck covers courts and general assignments for The Monitor. You can reach him at (956) 683-4437.