Editor's note: This story was originally published in the Belleville News-Democrat.
The superintendent of a Metro East school district that was certified as being “in financial difficulty” by the Illinois State Board of Education last week says the situation was caused by turnover in the district’s bookkeeper position and not its financial footing.
The union that represents the district’s teachers, however, has issued a statement saying they have been sounding the alarm about the district’s finances for years and calling for the removal of the superintendent.
Last Wednesday, Grant Community Consolidated School District 110 became the second Illinois district in the past decade to be certified as having financial difficulty by the state board of education. It now has until April 29 to submit a financial plan to the state board that addresses its deficits as well as shortcomings in its internal controls, grant management and financial reporting.
In an interview with the BND Friday, Superintendent Matt Stines said he fully respects the state board of education’s decision, adding that the state board is following its policies and procedures and providing support to the district to get things corrected.
“They’re doing what they have to do, and I’d expect nothing less from them,” he said.
According to Stines, certain financial documents were submitted to the state board of education late because of repeated turnover of the district’s bookkeeper.
“If you want to count myself, I had four bookkeepers handling the books during FY23, and that doesn’t bode well for anybody,” he said. “There just wasn’t the consistency in the accounting that needed to be there.”
Meanwhile, the Grant-Illini Federation of Teachers — which represents 76 teachers and non-certified staff in Grant District 110 — called on the administration to address the “district’s financial irresponsibility” and for the removal of Superintendent Stines in a statement released Monday.
“We have been sounding this alarm about our district’s financial position for years now,” the statement reads. “Our students and community deserve transparency and accountability when it comes to how public education dollars are being spent, but we haven’t had that in years.”
Financial difficulty
The Fairview Heights district has been on the state board’s “financial early warning” list for fiscal years 2021 and 2022, and its preliminary designation for fiscal year 2023 is “financial watch,” according to a memo from the state board of education. Financial watch is the lowest designation an Illinois school district can receive on its annual financial profile from the state.
The memo also says the district has regularly had a deficit in its operating funds, relies on regular working cash bond issues to supplement revenue in those funds and failed to apply for federal grants dating back to fiscal year 2020 in some program years.
Stines said the district has received the guidelines from the state board of education for its financial plan and that two consultants from the state have been assigned to help.
“The money is there, and it’s not that we’re in financial peril,” he emphasized. “This is a bookkeeping issue on how we show the expenditures to the state, and that’s why we’re doing a plan with them.”
The bookkeeper Stines had for the majority of his years at Grant 110 retired in December 2021, and he hired a replacement who then resigned in December 2022, he said. He wasn’t able to find a replacement until late February 2023, so for the time in-between, he filled in to make sure payroll was met and bills got paid.
The bookkeeper hired in late February resigned in May, and the current bookkeeper started in July.
Stines said he realized there was a problem when he was closing the books at the end of fiscal year 2023 last June. Bank reconciliations hadn’t been done correctly, which created a “snowball effect” of delaying budget submission and other documents.
“With cooperation with the state, I have no doubt that we will get the corrections made, and we’ll move forward and things will be back to good,” Stines said.
Teachers respond to certification
The statement from Grant District 110’s teachers union continues by saying the money the district gets isn’t being spent on teacher and staff salaries, highlighting that starting teacher salaries are “average” and veteran teachers are paid “significantly lower” compared to nearby districts. Additionally, non-certified staff don’t receive insurance benefits, it says.
Teachers at District 110 made an average salary of $50.8K during the 2022-23 school year, down from $55.8K in the 2013-14 school year, according to the Illinois Report Card.
At Pontiac-William Holliday School District 105 to the east of Grant 110, teachers made an average of $59.2K, and at East St. Louis School District 189 to the west, teachers made an average of $84K.
“Part of our role as educators is to advocate for our students,” the statement continues. “They deserve well-resourced classrooms and responsible school leadership. They deserve teachers who are respected and given a supportive teaching environment, not a district characterized by administrative bloat and inconsistent accounting. And their parents deserve clear answers — not excuses — from Superintendent Stines as to why we are at this point.
“Our union members have had enough, and to us, the solution is clear. We recently held a vote on the issue, and an overwhelming number of teachers and staff agree that Superintendent Stines must be removed from his position if we want to turn this district around. We need new leadership that will prioritize fiscal accountability. We need district funding to be used to increase resources for students and invest in teachers and staff, and doing that requires immediate change in management.”
The statement concluded by calling on the Board of Education to address the situation and inviting parents and community members to attend the March board meeting.
Stines had no comment on the statement from the teachers union.
Working cash fund
In addition to the district’s failure to submit financial information in a timely manner, the state board of education’s memo highlighted that Grant 110 has regularly had a deficit in its operating funds and relies on working cash bond issues to supplement revenue in them.
Like other districts in Illinois, District 110’s budget is broken up into nine separate funds. The operating funds — the educational, operations and maintenance, transportation and working cash funds — make up the bulk of the budget, and money can be transferred between them by board resolution.
According to Grant 110’s annual financial reports, the district has had a deficit in its operating funds for 19 of the past 20 fiscal years. For fiscal year 2023, it had a deficit of about $1.8 million in its operating funds and a negative fund balance of about $290,000 as of June 30.
The purpose of the working cash fund is to allow school boards to have sufficient funds in their treasury to pay for educational expenditures, functioning like an internal bank.
Districts sell working cash bonds, and then that money in the working cash fund can be temporarily loaned to other funds in the budget with board approval.
Grant 110’s deficits and annual financial reports don’t account for loans from the working cash fund since those funds have to be repaid, Stines said.
He said the district’s deficit spending goes back over 30 years, predating his tenure as superintendent. The district has used working cash to supplement revenue for a “very, very long time,” he added.
School districts get their revenue from local property taxes, state funding and federal grant programs. On average, Illinois school districts got about 63.4% of their revenue locally during the 2022-23 school year, according to the Illinois Report Card.
“In order to provide everything we need to for our kids, the local dollars and the state dollars don’t quite make enough of the money up, and we sell working cash bonds in order to supplement the education fund to cover our expenses,” Stines said.
The district has sold the bonds about every five years, he added.
“It was the way they operated before. It’s the way we’ve operated since I’ve been here. It has worked,” he said, adding that the district has had what it’s needed to provide for the kids.
“It’s a process we’ll still have to do unless there is some drastic increase in local property values or unless there’s a drastic increase in state funding,” Stines said. “But at the end of the day, despite all the things with the state and the action they took and the reporting aspect, our district’s getting enough money to operate, and we will continue to operate.”
On the Illinois Report Card for school year 2022-23, Illini Elementary received an “exemplary” designation, indicating it is in the top 10% of schools statewide in terms of overall performance. Grant Middle School was deemed “commendable,” the second-highest designation.
Federal grants
Another factor mentioned in the state board of education’s memo is that Grant District 110 has failed to apply for several federal grant programs.
Those programs include Titles I, II and IV of the Elementary and Secondary Education Act, the Individuals with Disabilities Education Act Part B and the third wave of federal COVID-19 relief funds for public schools referred to as ARP ESSER or ESSER III.
District 110 has been allocated about $1.54 million in ESSER III funds but has yet to spend any of it, according to the state board of education’s ESSER spending dashboard. The district received about $11K for ESSER I and $648K for ESSER II, which it has spent.
Stines said the district hasn’t expended the funds and submitted expenditure reports for ESSER III yet because there are still expenses this year he’s going to use the money for, like a training slated for staff this summer.
School districts get reimbursed for the funds after they’re spent, he said. He’s waited to access those funds because there were dollars flowing through in other areas of the budget, he added.
The deadline for school districts to obligate their ESSER III funds is Sept. 30, 2024. The relevant federal legislation requires districts to solicit local community input to inform their spending and make spending plans publicly available.
Kelly Smits is a reporter with the Belleville News-Democrat, a news partner of St. Louis Public Radio.
