Study shows almost $2 billion in surplus district funds

A new study shows that in 2015, Oklahoma public schools had almost $2 billion in reserve cash accounts.

The report showed that Tulsa Public Schools had $90,231,488 – second only to Oklahoma City Schools ($162,801,600) in terms of available cash.

Steve Anderson, a researcher for the Oklahoma Council on Public Affairs, investigated the cash reserves of public schools using data from the website of the State Department of Education. His report asked, “Why are school districts sitting on so much cash?”

“Would you believe that the schools’ largest revenue source for the 2015 school year was cash not spent in the prior year?” Anderson wrote. “The schools need to explain how they can be sitting on nearly $1.9 billion of unencumbered cash – cash that is not promised to any obligation currently – that they did not expend during the prior school year.”

The cash balances are the largest in history for Bixby, Jenks, Sand Springs and Union, according to the study. The average for the fund accounts were 34 percent for the general fund, 11 percent for building funds, 27 percent for bond funds, 19 percent for sinking funds (maintenance) and 5 percent for activity funds. The child nutrition fund averaged at 3 percent.

Broken Arrow with $63,063,361 and Jenks with $57,381,683 in cash in 2015 were near the top of the list statewide. That is considerably more than other large districts like Yukon at $17,841,823 and Stillwater at $14,005,455.

The report states that in the 2015 school year, the difference between revenues and expenditures was 23.1 percent. “This is the amount of revenues unspent, which explains how you get to such huge cash-forward balances,” Anderson wrote.

The OCPA report showed that the second and third largest expenses by function, which between them total nearly half of the amount spent on instruction, are “debt service” and “operation of buildings.”

Enrollment growth in some districts, particularly suburbs of Tulsa and Oklahoma City, seems to justify the construction of new buildings and voters in districts like Broken Arrow, Jenks and Owasso overwhelmingly support higher property taxes to add new classrooms and support facilities.

The report recommends cost-savings measures, including:

  • Varying time frames for the beginning and ending of the school day to better utilize school buses;
  • Online enrollment for certain classes;
  • Outsource some administrative functions to open up office space that could be converted to classroom use.

“These are just a few recommendations,” Anderson wrote. “Any businessman who has managed brick-and-mortar establishments could offer many more. Unfortunately, school administrators often tend to ask for more money instead of managing what they have better.

“Some school superintendents will trot out reasons and excuses for why they need to maintain such large cash-forward balances. And some of their explanations have merit. For example, holding a small amount of funding in certain accounts for unseen emergencies or missed billing payments is understandable.

“But some of the excuses don’t hold water. For example, some administrators will say these balances are needed for cash-flow purposes. They don’t seem to understand that the accrual of those expenses incurred but not paid should have already been made. Moreover, where else but in a government agency can you know your funding for the next 12 months and also know that you will be funded again after the end of that 12 months?”

Administrators say some of their cash-forward funds are federal funds that they cannot spend or that those funds are designated for the next fiscal year and can’t be spent this year.

Anderson said while may be true, the bulk of the money idly sitting in cash accounts is in the general fund.

He thinks schools should partner more with Oklahoma’s farmers to enhance the nutrition of school meals. That would save the districts money and help the state economy.

Anderson thinks the Oklahoma State Department of Education should take a role in consolidating functions.

“Administrators who continually complain about not having enough of the taxpayers’ money need to explain to those taxpayers why they are sitting on so much cash,” Anderson wrote “Before trotting out excuses, the tax consumers who run Oklahoma’s schools should walk a mile in the shoes of the taxpayers who run Oklahoma’s small businesses.”

School administrators with business backgrounds might be more effective than those with strictly educational training, he wrote.

He quoted OCPA president Jonathan Small, who said, “… our preK-12 education system currently has plenty of money – $8.7 billion in total revenues last year, the most in state history. But in a bloated system that employs more non-teachers than teachers, that money’s simply not going to the right place: take-home pay for the many excellent teachers who have earned a raise.”

The Oklahoma Education Association claims that the schools are underfunded due to lack of action by the Oklahoma Legislature, which is led by Republicans. The OEA says this has resulted in a teacher shortage because of low pay with more than 500 vacancies in state schools. This is following the elimination of 3,000 teaching and support positions due to a state budget shortfall of $1.3 billion, according to the OEA.

The answer from the OEA is to raise taxes by passing State Question 779, which would raise state sales tax by one cent (a 22 percent increase) and raise money for higher education, vocational education and common education (kindergarten through 12th grade).

“As the 2016-17 school year begins, the survey shows that nearly every subject in every grade is affected by the teacher shortage, leaving students choosing from fewer course offerings and sitting in larger classes,” OEA President Alicia Priest said in a statement. “With the vast majority of districts participating, the results show clearly that Oklahoma has yet to address this multi-year crisis in any meaningful way.

“The members of the Oklahoma Education Association believe our only hope lies in the votes we will cast on November 8.  State Question 779 will raise over $600 million for public education, including a $5,000 raise for every K-12 teacher.  It is the only legitimate plan Oklahomans have to change our current course of shortchanging Oklahoma’s students and teachers.

“There are far too few voices among our elected officials advocating for better fiscal policy to pull our state out of this recession, so casting votes for pro-public education candidates is more important this year than ever.  If Oklahomans want better for their children, they’ll have to say so in the ballot box on November 8.”

Tulsa County Schools

2015 Excess Cash

$63,063,361Broken Arrow
$21,590,762Sand Springs
$433,433Tulsa School of Arts and Sciences
Source: Oklahoma Cost Accounting Systems (OCAS)