Internal review shows excessive payroll spending at Edcouch-Elsa schools

EDCOUCH — An internal Edcouch-Elsa School Board report indicates excessive, unbudgeted payroll spending in the past year as the district enters a new fiscal period.

As of Aug. 1, the district had spent $1.3 million more than it had budgeted for substitute teachers and part-time and temporary employees through the 2006-07 fiscal year, which ended Aug. 31, according to an internal report presented at an Aug. 8 meeting.

More than $475,000 of the unbudgeted spending went toward substitute teachers — nearly 14 times more than the year before. School leaders say regular teachers have to spend more time out of the classroom because of increased trainig requirements.

In addition, the district spent $827,000 more than what was budgeted for part-time and temporary employees, with the majority going to custodial, maintenance and security work.

All this comes after a review the state Legislative Budget Board published in 2006 saying the district employed 77 employees more than it needed at the time ¡X at a cost of more than $1.3 million a year.

During its Aug. 29 meeting, the school board unanimously approved a balanced $60 million budget for the 2007-08 school year — a commendable feat for the state's fourth-poorest district, says schools Superintendent Michael Sandroussi.

Excessive hiring

Two school board trustees, who said they typically are in the minority on board votes, charge that the board hired dozens of workers for political reasons.

In an interview prior to the Aug. 29 meeting, board trustee Florestela Rodriguez said that the district had hired dozens of workers as political favors for other trustees before the May elections, but would not give any names.

"There was a combination of friends, family members, I can't give any names," Rodriguez said. "To me, it seems like people who were going to help them in the election, and that's why they were hired."

Trustee Felix Garza speculated that the district currently employs 150 excessive employees.

"§It's for political reasons, you know, just to get elected," he said.

Sandroussi, who was hired in 2003 after serving as superintendent of Skidmore-Tynan schools northwest of Corpus Christi, said that the district's budget fluctuates throughout the year as its financial needs change.

"A budget is a living document," he said Aug. 29. "It's a working document throughout the year."

But state oversight authorities say that is not necessarily the case.

Texas Education Agency spokeswoman Debbie Ratcliffe said "there can be some circumstances" where a budget may change from when it is first adopted, such as natural disasters or rapid growth.

"You want to have a budget that is as solid as possible when it¡¦s adopted in August," she said.

The district allocated no money for substitute teachers, but spent more than $475,000 for the subs — nearly 14 times what it spent in the 2005-06 school year.

Board President Juan Jose Ybarra Jr. said "it's hard to budget" for part-time and temporary staff and substitute teachers.

"Every time a teacher is out, you've got to replace it with a substitute," Ybarra said of the $475,000 spent on substitute teachers.

Sandroussi said the district faced "an exceptional amount of training requirements last year" that required teachers to miss classes, justifying the spending.

Litany of reasons

According to the Legislative Budget Board report, Edcouch-Elsa kept 191 individuals on its substitute teacher list, 59 percent of whom only had a high school diploma or GED certificate.

The district budgeted nearly $843,800 for all part-time and temporary employees for the current 2007-08 school year, up from just $54,800 for 2006-07.

In an e-mail to The Monitor, Sandroussi wrote that the unbudgeted spending came from an "increase in utilities, increase in Fuel Costs under the transportation area, and additional staff members (teachers and other staff) due to increase in student enrollment."

Sandroussi would not provide The Monitor with the amounts spent on fuel and utilities, though.

As of the 2006-07 school year, the district's enrollment had increased about 2 percent since 2005, but its unbudgeted spending on substitute teachers, part-time and temporary employees had more than doubled.

Sandroussi also cited excessive water expenses, unexpected employee absences, overtime for maintenance staff while fixing leaky roofs and extra security personnel for extracurricular playoff games.

The district spent more than $600,000 on overtime for teachers, student transportation, food services, custodial, maintenance and security, according to the Aug. 8 report.

In his weekly memo to the trustees, Sandroussi warned the board about talking with the media, reminding the members that what they may say could be used against them later, Garza said.

An unclear balance

How much money actually sits in the district's fund balance remains unclear.

Edcouch-Elsa's unbudgeted spending has come from its fund balance, or financial reserves, Rodriguez said.

The fund balance currently sits at exactly $4.5 million — less than a month of operating expenses, according to the district's 2007-08 budget approved Aug. 29.

Ratcliffe said TEA recommends that districts should keep two to three months of reserve money in the fund balance to help cover unanticipated or emergency expenses.

With Edcouch-Elsa's $60 million annual budget, that means they should have as much as $15 million in the bank at all times.

But the district had an un-audited balance of just below $3.9 million in the fund balance as of July, according to the agenda book from the district's Aug. 15 meeting. That compares with an audited fund balance of nearly $6.9 million on Sept. 1, 2006.

Ybarra said some money from the fund balance was spent on completing the district's fine arts complex, which had faced problems after its initial contractor defaulted on the project.

"We were stuck with a $6 million building that wasn't finished," he said. "That money has to come from somewhere."

According to a separate internal report presented to the trustees Aug. 1, the district spent just $800,000 from the fund balance to complete the building.

The numbers also show a $600,000 on an "estimated deficit" during the 2006-07 school year, plus $50,000 that spent on band instruments and $551,640 on athletics. That report claimed the district had a $4.8 million fund balance as of Aug. 31.

The conflicting numbers make Garza question how much money the district really has available.

"Honestly, I don't trust what's going on," Garza said.

Still, Edcouch-Elsa's current budget will remain on target without spending anymore of the district's reserve funds.

But it will not add anymore money to its savings, Sandroussi said during the Aug. 29 board meeting.

____

Jared Taylor covers Edinburg, the Delta region and general assignments for The Monitor. You can reach him at (956) 683-4439.

The state Legislative Budget Board recommended several improvements for the Edcouch-Elsa school district, including:

— The Board of Trustees overstepped its role as a policy-making body by interfering with the district¡¦s daily operations.

— The board lacked a plan for how to manage the district fund balance.

— The district lacked a selection or monitoring process for legal services.

— The district had a decentralized and inefficient personnel organization.

— The district failed to use locally developed or industry standards for determining staff requirements.

Among the excessive positions, the board said the district should have eliminated:

— 15 of the district¡¦s 54 custodians to save more than $380,000 per year

— About 14 of the district¡¦s 38 clerks or secretaries, which would save more than $291,000 per year

— 15 of the district¡¦s 39 educational aides, which would save more than $288,000 per year

— 23 of the district¡¦s 82 child nutrition staff to save more than $263,000 per year

**None of the cuts have officially been made.