Error causes $2M deficit

The Kamloops-Thompson school district says no staffing cuts have been made as a result of an accounting error that caused a deficit of more than $2 million.

The error occurred in the district’s 2023-24 financial forecast, in which a piece of revenue was counted twice.

It wasn’t caught until July, but by then the district was already spending from what it thought was a $3.37-million operating surplus.

“We weren't able to get in front of the board in enough time to slow down spending, because we were spending according to our 2023-24 amended annual budget,” SD73 treasurer-secretary Trina Cassidy told Castanet.

Cash was spent on items Cassidy said were necessary, including teachers, support staff, supplies and services.

“We spent funds on our portion of the Valleyview Secondary expansion, we purchased portables, classroom furniture and, of course, information technology, and then there was one vehicle for the maintenance crew,” Cassidy said.

The error left the school district with a deficit of $784,021 in its operating fund and $1,274,139 in its local capital fund.

“We have corrected our worksheet to better align with the way that the financial statements are presented and the way that the budget document is presented,” Cassidy said.

Plan in motion

According to SD73’s 2023-24 audited financial statements, costs associated with consistent enrolment growth have left existing operating fund and local capital fund reserves “significantly depleted.”

“As such, the district has decided to carry the Local Capital Fund deficit and the portion of the operating fund deficit not associated with an existing reserve, as a negative amount within the internally restricted reserves,” the audited financial statements state.

The reserves in SD73’s operating funds — which includes local capital — have dropped to $1.45 million, from $3.5 million at the beginning of the year. The $846,923 in the district’s local capital fund has been drained completely.

SD73 superintendent Rhonda Nixon said a repayment plan will be presented to the board of education on Monday, Sept. 23, which will reduce budgets in order to address the shortfall within a year or two.

“Because we have a small, internally restricted reserve and no local capital, that's why we have to be very careful and monitor the plan,” Nixon said.

“The goal is two years. But again, we are a big district. There can be things that occur that make it extend.”

Nixon said district staff would be working to make sure proposed reductions as part of the plan won’t be “too close to students.” She said no staffing cuts have been made as a result of the plan, nor are any planned.

“We searched for the reductions that would have the least impact,” Nixon said. “We're hopeful it will be enough.”

Not shying away

Nixon said the school district isn’t shying away from the shortfall and is intending to be transparent with its repayment plan.

She said district staff have met with principals, managers and directors and a high-level overview of the plan has been shared with district partners. Nixon added the audited financial statements were presented at the board of education’s public meeting last week.

“This is not easy, but we are functioning as a team, and we are collaborating to try to solve a very difficult problem,” she said.

“We have worked extremely hard to get this put together as quickly as we have, and we'll continue to do so to make sure that students are well adapted, and that's really important.”