fThe School District 67 Board of Trustees voted on Feb. 24 to hire an external financial expert to help them balance their books. (Phil McLachlan - Western News)

Financial expert to help South Okanagan school board with substantial deficit

The board of trustees for School District 67 will hire outside help to deal with budget concerns

An external financial expert will be brought in to help School District 67 balance its books after concerns were raised by members of the public and trustees about its financial situation.

During a board meeting on Feb. 24, questions were asked about how the trustees plan to deal with its substantial deficit, which remained unclear by the end of the meeting.

As a result, trustees decided not to give third reading to the $73 million budget for the 2019-20 fiscal year.

“It’s really unclear, and I think that’s part of the reason the public was asking for another look was it seemed to be a moving target,” said Okanagan Teachers’ Union President Kevin Epp.

“When you’re trying to fill a hole and the hole keeps changing in its size, it gets a little bit frustrating.”

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In a report submitted to the board of education, secretary-treasurer Kevin Lorenz stated that without further reductions, the district would face a shortfall of over $800,000.

However, throughout the evening that number seemed to change, raising concerns from the public as well as trustees.

The board explained that the deficit was largely due to an unexpected decline in enrolment, however that failed to appease many members of the public.

During the meeting, members of the public expressed frustration at the alleged lack of transparency shown by the school district and requested a financial audit by a third party.

After listening to the public’s concern, the board voted 4-3 to hire an external financial expert to look over the 2019/20 budget and help develop the 2020/21 budget.

Trustee Kathy Pierre, Tracey Van Raes, Barb Sheppard and board chair James Palanio voted in favour of the motion to hire the financial expert.

Before the vote, Trustee Dave Stathers voiced his approval for an independent audit but ultimately voted against it.

“For the sake of transparency, open up the books,” he said. “Something went wrong? It’s there.”

Some members of the board criticized the $10,000 cost to hire the financial expert, however, Stathers quickly shut that down.

“In a $60-million budget, $10,000 is nothing.”

Despite his apparent support to hire the financial expert, he ultimately voted against it in the end because he preferred a full financial audit, an option that is much more costly and dives deeper into the numbers.

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Before this motion being brought forward, Superintendent Wendy Hyer explained they unexpectedly lost about 100 students this year, lowering the expected per student allocation from the province.

In addition to this, an increase in staffing costs, an increase of more than 25 per cent in students with complex needs and an increase in substitute costs contributed to about $1.5 million in more costs, which were not anticipated in the budget. Cuts have already been found, but SD67 still has an estimated $800,000 shortfall to deal with.

After the meeting, Epp, who was vocal about his concerns during the meeting, said he was happy with the evening’s results.

“I’m really pleased that the trustees have listened to concerns coming from the public, coming from educators saying; ‘we’re concerned that maybe the true budget story isn’t as accurate as it could be, or should be,’” he said.

“This process with either show through financial review that everything is as it should be, and that the shortfalls are a direct result of declining enrolment, or it will show that there’s some problems with the system that need to be addressed.

“I think that’s the best you can ask for from your elected officials, is when they think there’s a concern, they take steps to shine a light and see if there’s something that needs to be dealt with.”

The school district has until Friday to balance its books and pass an amended budget.

Epp said barring the board calling a special public meeting this week to pass third reading of the budget, it will not meet Friday’s deadline. This, he said, could result in further involvement by the Ministry of Education which he hopes will result in a review of the district’s financial situation.

School District 67 provides services for about 5,900 students in the communities of Summerland, Naramata, Kaleden and Penticton.

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