Berkeley County School District announces $7.2 million shortfall

Financial woes continue for the Berkeley County School District. At the district’s board meeting on March 28, Interim Superintendent Deon Jackson announced to board members in a presentation on the school improvement fund that a $7.28 million shortfall has been detected in the construction/renovation fund.

The overall fund is part of the $198 million “Yes 4 Schools” referendum approved by voters in 2012 and was intended to cover costs associated with the construction of five new schools and multiple renovation projects. According to Jackson, a total of $104 million has been drawn on the construction account as of two weeks ago. With expenditures totaling $139.6 million, that left a $35.5 million difference. The district covered the shortfall by dipping into a general reserve cash account, said Jackson.

“This was done to inject some cash flow into the building program, in order to keep those projects moving forward,” he continued.

On the equipment acquisition fund side, Jackson reported that $44.4 million had been withdrawn from the account for expenditures to date, with $32.6 million being spent on actual equipment. The resulting positive difference of $11.8 million was used as an advance to replenish the building program’s shortfall, Jackson said.

Transferred funds will be re-payed to the appropriate accounts, Jackson noted. Total projected costs to complete the building and renovation program are $105.2 million, he reported. They expect to receive an additional $98 million in bond funds soon to be used towards that total - leaving the district short about $7.28 million. Jackson said the district could pull those monies from their Wells Fargo “general investment account” and from an anticipated bond premium payment.

Board Member Mac McQuillin, a Daniel Island resident, expressed his thoughts on the discrepancies after Jackson’s presentation.

“As to the transparency issue, I want to thank Chairman Wofford and district leadership for bringing this to our attention,” he said. “I’ve never been told by any past board chairman or leadership that this ‘shell game’ was going on, where we were using equipment funds for other purposes. I’m glad that we’re dealing with it now, but to just find out about a $7.2 million shortfall is certainly disappointing.”

"The intent of our presentation…was to notify the Board and our public about the district’s current situation concerning our construction projects and financial positions,” stated Jackson, after the meeting. “We were particularly cautious to use conservative estimates in our calculations. Based on what we know at this time, our report accurately illustrates present shortfalls and the recommended remedies moving forward.” Jackson added that he is “cautiously optimistic” that their proposed solutions will move them toward delivering on promises made during the 2012 bond referendum.

“Obviously, it is going to take time for these plans to take hold, but we commit to regularly keeping our stakeholders updated throughout the process.”

Last month, the board made the decision to terminate long-time Chief Financial Officer Brantley Thomas for alleged misconduct, after Thomas reportedly confessed to taking close to $400,000 from the district’s coffers for personal use. To see Interim Superintendent Jackson’s recent presentation to the board, click on link below.