With her face bright red and holding back tears, North Okanagan-Shuswap chairperson Bobbi Johnson acknowledged failure over the school district’s transfer of more than $10.5 million in surplus operating funds into capital funding projects in the past five years.
Johnson was speaking to about 150 parents and teachers at the District Parents Advisory Council meeting April 7 at Ranchero School.
There were audible gasps from the crowd when Johnson said she and other trustees had no idea that annual surpluses varying between $700,000 and $2.9 million for the past five years had been moved from the operational budget into the capital fund.
Capital budgets are used to fund tangible assets like buildings, computers, vehicles and furniture. Operating budgets are used to allocate the funds for school services, including wages for school staff and programs for students.
The issue came to the forefront when Noah Ralston, a parent and teacher, began to review the public budget documents and enlisted the help of an accountant to track the funds.
Johnson told the upset crowd that the transfers were always shown in the budgets, however, there were no specific motions created for trustees to approve how surpluses were used.
She said, going forward, this will no longer be the case and a separate motion regarding surpluses will be presented to trustees.
“We all saw the budget, we went through it. It was a one-line transfer in the budget. We all missed it… Moving forward we are going to be way more transparent about this than we have been in the past.”
Trustee Michel Saab differed from Johnson in saying there was a vote four or five years ago about transferring funds for capital purchases.
“I remember that,” he told the crowd, “but then it seems that it became the current practice and there was no longer any flagging of it.”
There is nothing illegal about the school district’s process of transferring funds. Information provided by the school district indicates 58 out of the 60 school districts in the province have transferred operational surpluses into capital funds.
Parents, however, expressed the feeling that while legal, the transfer of funds was not ethical, especially since the situation was not made clear to the taxpayer.
The DPAC also noted it would like transfers between operating and capital budgets to be flagged with an auditor’s note in budget reports to draw attention to the practice.
Many in the audience wondered how the transfers could not have been noticed by school trustees in more than 10 years of budgets.
“This is not my job, this is your job and you have failed us miserably,” called out one parent during the discussion.
“And we have,” Johnson agreed.