There Goes Another $5.9 Million of Surplus Cash

Last night, the  MBUSD Board of Trustees directed Superintendent Matthews to transfer $5.9 million from fund 17 to fund 40. This effectively removed that money from being counted as part of the District’s surplus cash. Traditionally, the unrestricted and unallocated balance in fund 1 (general fund) and the balance of fund 17 were counted simply as surplus funds. In January 2011, Statement 54, a directive issued by the Governmental Accounting Standards Board (GASB), required new standards in reporting.

The new directive asserts that “[w]hile [Fund 17 is] authorized by statute and will remain open, the CDE notes that [it] function[s] effectively as extension of the general fund, and recommends either that they be combined with the general fund for presentation in the audited financial statements, or that the departure from GAAP be explained in the financial statements.” MBUSD Board of Trustees forgone the obvious treatment of the money and decided not to include the $5.9 million in fund 1, where that amount would have increased the balance to over $22 million and would have made the full amount a consideration at the negotiating table.

Instead, the money was placed in fund 40, where it is earmarked for capital outlays, in other words could not be used for teacher salaries. Why would the District wait until a year after such directive and right before contract negotiations are set to begin? One possibility would be that the Board wanted to make sure they did not need the cash for anything else before committing the money to a fund they could not subsequently easily reach. Another possibility would be that the Board was waiting to see how MBUTA reacted to the large surplus of funds before making the money less accessible.

In the last three months, the District has re-allocated $7.2 million away from general use and spent or committed to spending nearly $1.5 million on frivolous technology. The combination of these reduced the liquidity of the District by $8.7 million. In a time where cash is king, CBOs claim unable to balance budgets, and districts cry for help with open palms, this Board is acting with utter disregard.

There Goes Another $5.9 Million of Surplus Cash