DeKalb among several school systems in Georgia showing a budget deficit

The economy may be recovering, but the public sector is still in turmoil, with an unusually large number of Georgia school districts ending the past fiscal year with a budget deficit.

Six school systems, including DeKalb County, Georgia’s third-largest, reported negative balances at the close of the fiscal year on June 30, according to the Georgia Department of Education.

The department also oversees state-chartered schools, and it said two of those had a deficit.

Eight might seem like a small number, given there are 180 school districts in Georgia and more than a dozen schools chartered by the state. But state law does not allow local governments to run deficits unless there is a remediation plan, and thus deficits are rare.

“To have eight is highly unusual,” said Scott Austensen, chief financial officer for the state DOE. “And, frankly, if things continue the way that they are, we may have more than that at the end of the year.”

Besides DeKalb, which the state said had a $14.5 million deficit, the other school systems with deficits were Brantley County near the Georgia coast ($16,000), Stewart County ($145,000) and Talbot County ($139,000) in southwest Georgia, and the city systems of Commerce northeast of Atlanta ($115,000) and Dublin to the south ($3.5 million). The two state-authorized charter schools with a deficit were Scholars Academy in Clayton County ($102,000) and Heritage Preparatory Academy in southwest Atlanta ($259,000).

DeKalb cut $78 million in proposed spending this year, reducing its budget from $775 million last year to $730 million.

District officials did not return calls for comment, but DeKalb school board Chairman Eugene Walker questioned the state’s findings.

“I don’t understand what you mean that we had a deficit,” Walker said, adding he thought there was a surplus. “So the $57 million I thought we had didn’t exist?”

The deficit was calculated from numbers the DeKalb system provided to the state, Austensen said. “In theory, it could be wrong, but if it’s wrong, they’re out of compliance with their reporting.”

Austensen said a history of inaccurate financial reporting appeared to be part of DeKalb’s problem.

“I actually think the local board didn’t have good information in front of them about their spending,” he said.

DeKalb school Superintendent Cheryl Atkinson, in the job about a year, is trying to change that, he said, but prior administrations painted a rosier picture than merited.

“By now, everybody should have figured it out,” Austensen said. “It’s not like a tiny little system that has a bookkeeper who doesn’t know anything about accounting.”

State Sen. Fran Millar, R-Dunwoody, who chairs the Senate’s Education and Youth Committee, said the situation has worsened since June. “It’s my understanding that the deficit is substantially higher than $14.5 million right now,” said Millar, whose grandson attends Austin Elementary.

“They need a plan,” Millar said. “This thing is a disaster. … I feel very, very bad for the people with kids in the DeKalb school system right now.”

DeKalb and the others must submit remediation plans in the next two months, then report back monthly to the state Board of Education. If they refuse to comply, they could lose state funding, but Austensen said that’s never happened.

Natilee Brown-Van, the principal at Heritage Prep, where 148 of the 168 students were poor enough to qualify for free or reduced lunches, said she had to spend extra to rent buses to get the kids to school. She said she’s already received enough grants to put the school in the black for this year. “We filled our gap,” she said.

Dublin hopes to get its budget back in line by reducing staff by a fifth over the next three years and with 10 new furlough days this year, said Christi Schien, the city school system’s new financial director. Schien said the system failed to react when state and federal revenue started to fall. “We didn’t do a good job of trying to absorb that,” Schien said.

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