By Sarah Shurge – Over the summer of 2023, the Wayne-Westland Community Schools (WWCS) learned about significant issues related to the district finances.
The WWCS has been in a close budget review following the annual fiscal audit.
WWCS Superintendent John Dignan shared these facts with the community through letters on October 24th, December 7th, and December 8th
Thursday, December 14th, Wayne-Westland Community Schools posted a video on Facebook to help explain their ongoing work and strategic direction as the financial investigation wraps up.
“There is no evidence of missing money,” said Chief Financial Officer Julie Campbell. “There were two major budget issues that contributed to this surprise decrease in the district fund balance from what was projected to be 15.6% to an actual fund balance of 6.2%.”
This reduction resulted from two significant budgetary issues.
Campbell explained that in school finance there is what is termed “flow-through transactions.” This is anticipated revenue designated for a specific purpose offset by corresponding expenditures. Meaning: your revenue coming in is equal to your expenditure going out, and your change to the bottom line is a net zero. “One such transaction amounting to about 8.4 million dollars targeted for the Office of Retirement Services (which is the state pension system) had a significant impact on our fund balance,” said Campbell. “Unfortunately, while the revenue was budgeted, the corresponding expenditures were not. Creating a misleading appearance of a higher fund balance.”
Campbell explained the second budgetary challenge arose from various factors including: all staff seniority steps, salary increases, new bonuses, and a 4.1% increase in district-wide healthcare hardcaps.
Other contributing factors were a significant surge in the district’s retirement contribution liability and operational costs spiking due to inflation.
All these factors totaled approximately 15 million dollars more (mostly in wages and benefits) than the prior year.
“Regrettably these increased expenditures were not factored into the final budget amendment, contributing to the apparent decline in the fund balance,” said Campbell.
Campbell emphasized that there is no missing money and that the perceived discrepancy in the district fund balance results from expenditures not included in the final budget amendment.
“When the budget discrepancy was identified, the district responded immediately and worked with our new financial team to understand what had occurred,” said Superintendent Dignan. “I’m confident that working together with our board of education, union leadership, and school community, we will get through this.”