Districts Cope With Late Payments

January 11, 2010

With the recent announcement that Kansas is delaying $200 million in aid payments to public schools, many Kansas school districts are once again violating cash management laws to pay their own bills.

"It scares me to death," said Mike Mathes, Seaman Unified School District 345 superintendent. "We just barely get by. I just hope this legislative session gets us out of this situation with our heads still above water. I believe they will do what is right for our Kansas kids."

Seaman recently owed $500,000 to vendors but only had $492 in its vendors account, Mathes said.

The district closed elementary schools and consolidated for the 2009-2010 school year, which has helped the distri ct stay afloat, Mathes said.

"That and the fact that we are a growing district has kept our heads above water," he said.

This is the third consecutive month the state has had to postpone payments to the 295 school districts, an Associated Press story stated. And state officials are expecting nearly 100 districts will be forced to violate the cash management laws.

The payments to schools, which represent part of general aid to districts, were due the first day of the new year.

Deputy Education Commissioner Dale Dennis said the state plans to make half the payments by Monday. But districts won’t see the rest until the end of January.

"It is sad, but we don’t have the cash to pay on time," he said.

By delaying payments to public schools, the state was able to cover $25 million in payroll expenses last week, said State Budget Director Duane Goosen.

But districts are worried about making payroll, too.

"We have money, capital outlay, and legally, you’re not supposed to use it," said Randy Freenman, Silver Lake USD 372 superintendent. "I can assure you if it comes to breaking the statute or making payroll, I’m going to pay the payroll."

Luckily, Freeman said, the district hasn’t had to do that — yet.

Auburn-Washburn USD 437 superintendent Brenda Dietrich said the district spends $2.8 million per month in payroll and there is only $1.2 million in contigency funds.

"You have to do what you have to do to make payroll," she said. "We have used cash from whatever fund there is cash available. We are thankful that we have some cash reserves we can access during these desperate times.&qu ot;

General aid payments to schools in November also were delayed. Half the funds didn’t arrive until early December. The state also postponed general aid payments and special education funding in December.

Topeka USD 501 superintendent Kevin Singer said although the district is having financial difficulties, it is lucky enough to be in a better financial situation than some other districts across the state.

"I’m appreciative of the financial standing that the district is in," he said.

Shawnee Heights USD 450 hasn’t had to violate any statutes to make payroll or pay vendors, said Shawnee Heights USD 450 superintendent Marty Stessman.

"But to say that the late state aid payments haven’t been a problem is not totally accurate," he said. "We are fortunate to have a good balance in our contingency reserve fund, and so far we have been able to move expenditures to the funds in which we have a cash balance in order to make payments on time and in compliance with state statutes. We monitor our fund balances very closely and expenditures are limited to essentials."