Our View: Public boards need members who understand finances

 

 

 

At first blush, there appears few things the Lowndes County School District, East Mississippi Community College and the city of Columbus have in common. 

 

Each has its own unique mission, challenges and responsibilities. 

 

What they do share, unfortunately, is serious difficulty in managing their finances. 

 

This week, we learned EMCC has blown through what was an $11 million fund balance in the last 10 years. Even as EMCC's most ambitious project, the $42-million Communiversity, begins operations in a few weeks, a report in Thursday's Dispatch shows a decade of heavy deficits and enrollment decreases.  

 

Sound familiar? 

 

It does if you have been following LCSD's struggles. In April, the district admitted it would likely be forced to raise property taxes in the wake of a projected $2.5 million deficit by the end of the school year in June. Over the past three years, the district had operated at a combined $8.2 million deficit, watching as its fund balance went off the cliff -- from $17 million to just $4 million. 

 

A few months before that, the city of Columbus' own budget woes came into the spotlight when then-CFO, Milton Rawle, told councilmen the city had operated at an $881,000 deficit in 2018. (It operated at a similar deficit the year before.) Earlier this year, a CPA consultant for the city said Columbus would be overdrawn by $338,000 in September if changes weren't implemented to cut expenses. 

 

Mayor Robert Smith has designed a plan to close the gap, although there is no indication to what degree that effort has succeeded so far. 

 

Each of these three entities has the equivalent of a CFO, whose responsibility it is to keep the books and to properly inform their president/superintendent/mayor and their governing boards of the current financial status. 

 

In each case, either the CFO failed to properly inform or they were simply ignored. It's also possible that some board members didn't understand what was being reported. 

 

Both of Lowndes County's representatives on EMCC's board are businessmen. Perhaps not coincidentally, both are helping force school administration to deal with the overspending before it gets worse. 

 

The finances of these institutions are complex, and understanding those finances is a learned skill. Appointing/electing people to these boards who have that skill is crucial to fiscal responsibility. 

 

The entire board doesn't need to be made up of business men and women. And the presence of a fiscally-intelligent person certainly doesn't guarantee financial prudence. But there must be someone on these boards who can not only digest the CFO's reports but who can also understand the numbers underlying the reports. 

 

It's no small task: Our public entities are often the size of large corporations, managing budgets of tens of millions of dollars a year. In these public organizations, though, we all are the shareholders. And when public boards act irresponsibly, we pay the price. 

 

With LCSD and Columbus we are almost certainly facing tax increases as a result of deficit spending. If EMCC doesn't right their ship, we may there too. 

 

All three of these institutions must do better. They must have people on the boards who understand finances, they must get their spending under control and they must be responsible.

 

 

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