The New Westminster school district was predicting a balanced 2011/12 budget in the spring, including clawing its way out of a remaining $521,000 deficit from three years ago, but the news turned bleak Tuesday when it was revealed that the district overspent by $2.2 million last year.
That means the district owes $2,788,000 to the Ministry of Education. By law, school boards have to submit a balanced budget.
Secretary-treasurer Brian Sommerfeldt gave an update on the status of the board's financial woes at the school board's finance and facilities committee meeting on Tuesday. The presentation left some school trustees questioning why the shortfall wasn't caught sooner and calling for a more thorough and ongoing accounting practice.
Trustee Lisa Graham questioned why the board was getting the budget deficit information so "late" in the year.
"It is very disappointing," she said. "I would like details."
Graham said the district is in a "serious situation."
"We are already under the scrutiny of the auditor general," she said. "This is something we really need to be more vigilant about. When we run into this situation, the fallout hurts everyone, particularly (those) on the front lines."
The district had a hefty $3.2 million deficit in 2008/09, but had managed to pay back a significant portion over the last three years, with $521,000 remaining.
Sommerfeldt said the deficit can be attributed to lower May enrolment, additional staffing - including teacher-on-call costs - building maintenance and operations, and issues with business processes, including tracking of financial information.
At Tuesday's committee meeting, trustee Casey Cook called for a "deficit for dummies."
"We need to understand what the reasons are (for the deficit)," he said.
Cook also said the district needs to act fast when it comes to cutting back on costs this year. The second-term trustee said it was "painful" the last time they had to slash jobs, and he'd hoped they wouldn't have to go through it again.
"The longer we wait, the time we have to make the cuts diminishes and that means the cuts will be more severe," Cook said.
The district doesn't have any "low-hanging fruit" to lose, as it is already lean in terms of staffing, he said.
"We clearly need to make adjustments, and we need to make them quickly," he said. "I think for a number of people there is discomfort ahead."
Trustee David Phelan said the board needs to develop a "structural plan" to avoid this situation in the future.
Board of education chair James Janzen said the budget shortfall "highlights a sort of ongoing problem," and he also called for a detailed report on the situation.
"We are not a Cadillac district here," he said. "It's very difficult in the budget situation we find ourselves in."
Janzen said there hasn't been an increase in funding for education in a "large number of years."
"So we are trying to make do with less," he said, but added that the district is still "responsible" to balance the budget, which it failed to do.
Trustee MaryAnn Mortensen spoke after Janzen, saying the district was "accountable" for the shortfall.
"I certainly wasn't pointing fingers," Janzen said.
Trustee Michael Ewen said it's difficult to predict budgets under the ministry's process.
"Part of the issue has always been the ministry takes money away mid-year," Ewen said. "It's something we need to address with the ministry."
Still, he acknowledged the district's role in the budget woes.
"I don't think any of us has enough words to say how disappointed we are to have ended up in this situation again," he said. "Obviously, people need to be responsible for their budgets ... if they go over budget, they need to be prepared to take responsibility for creating an environment where that can happen."
Ewen told the committee that he'd heard of an incident in the summer where a handful of employees were brought in to do a job that casual employees could have done for less.
Staffing costs need to be brought to the secretary-treasurer, Ewen said.
The district also faced financial woes last fall, when it was predicting a deficit, which it was later able to overcome with surprise "holdback" funding from the province.
At that time, trustees talked about the "disappointment" they felt, and some called for the board to set up a contingency fund to deal with unanticipated costs.
Sommerfeldt told the committee that the district will review business processes to ensure timely reporting of financial information to the board; review the 2012/13 operating budget to see if there are any structural issues; expand the terms of reference of the district's audit committee, including detailed oversight of interim financial reporting and present a deficit recovery plan to the board no later than Oct. 23.
