Audit: More cuts needed at Northmont Schools


IN-DEPTH COVERAGE

This newspaper studies state audits, financial forecasts and levy requests to explain how local schools and governments use your tax money.

A new state audit of Northmont schools says the district was significantly overstaffed during the 2015-16 school year and could save $2.2 million per year largely by eliminating 27 full-time employees.

But school leaders say they already made about half of those cuts and that making more just to bring staffing in line with “peer districts” would hurt students.

This newspaper’s review of the audit found two other key issues — that the audit largely ignored Northmont’s comparatively low salaries, and that dramatic changes in the district’s budget raised eyebrows at the state.

Auditor of State Dave Yost’s office said Northmont didn’t adjust staffing properly as enrollment dipped from 5,943 students in 2008 to 5,034 in 2015, leaving them with more teachers, clerical workers, nurses and other staff than districts of comparative size. The performance audit also suggested Northmont tighten health-care and severance benefits.

District officials said this week they are working on the health-care benefit issue, and added that they’ve recently eliminated about 13 positions by leaving jobs empty after people left.

But they pushed back against making deeper cuts.

“We’re always looking to be fiscally responsible, but we have to balance that with how do we best educate students,” Northmont Superintendent Tony Thomas said. “It’s a lot more comprehensive decision than just looking at numbers and peers and full-time equivalents.”

Performance audits are intended to show school districts and other agencies where they could save money, but the district is not required to act on the findings.

‘A lot changed’

The audit focused heavily on the number of employees at Northmont, but barely mentioned how much the district pays its employees. State auditors studied that as well and found that Northmont’s salary schedules are “lower than the local peer average in every category.”

But that information was limited to one sentence in Appendix B of the report.

Asked whether the district’s lower pay might offset or justify its higher staffing, the auditor’s office said pay was “not a factor in our analysis … It does, however, provide context.”

In order to reduce staffing from last year’s levels to the peers’ average, the audit says Northmont’s cuts would have to total 10.5 teachers, 7.5 office/clerical staff, 3.5 technology staff and 5.5 professional staff, such as counselors and nurses. That adds up to 27 positions.

“The sooner you take action, the easier it is to straighten out your finances,” Yost said in a statement about the audit. “(Northmont’s) proactivity is already starting to pay off.”

The auditor’s office also had some confusion about how many cuts Northmont has already made. The audit mentions $626,000 in savings from one round of cuts, but also references two other reductions that would add up to 32 total positions eliminated.

Asked about the discrepancy, Northmont Human Resources Director Amy Sipes said the district had planned to cut 19 jobs, but eventually settled on 13 positions because of an influx of special needs students.

“This whole process started in November, and some of these numbers are snapshots on the way through,” Thomas said. “As you can tell, a lot changed in our district. … It looked different from March, to May, to now.”

Improved outlook

The audit shines a light on the five-year forecasts school districts often use to justify putting levies on the ballot. The Ohio Department of Education calls the five-year forecast “as much of an art as it is a science.”

In Northmont’s case, the forecast changed dramatically in less than a year.

Northmont draws from a wide area that includes Clayton, Englewood, Union and Phillipsburg. In October 2015, as Northmont planned to put a levy on the March ballot, the district projected skyrocketing expenses and massive deficits. Its five-year forecast said the district would run out of money at the end of 2016-17 and be $39 million in the red by June 2020.

But by July of this year, when the district reported its final, year-end numbers for the audit, Northmont said it was well in the black for 2015-16. Just two months after saying it would end the year with a $5.6 million balance, the district reported an ending balance of $13.1 million. The improved outlook came even though the 5.9-mill levy voters passed in March won’t begin flowing into the district until 2017.

District Treasurer Ann Bernardo attributed the revised outlook to savings from planned personnel cuts and a new accounting approach, which moved some project spending out of the general fund. The state audit also mentions that the district started reporting actual financial encumbrances rather than estimates.

“By no means were we trying to disguise anything,” Thomas said. “We were just trying to put the district on a stronger foundation, so we can stretch this before we have to go back out and ask for new money again.”

State Auditor’s spokesman Ben Marrison said their office has “noticed a lot of variability in the five-year financial forecasts” that are done by Ohio school districts.

“It is very difficult to test the accuracy of the estimate,” he said. “(This is) a question we need to help answer because policymakers and voters want to know how far they can trust these estimates.”

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