Lehighton Area School District’s ongoing annual state audit will tell the official tale, but administrators painted a grim financial picture Monday night during an update before the school board’s finance committee.

Business Administrator Patricia Denicola said as of Monday, the total ending revenue for the 2018-19 school year is projected to be $42,101,764, compared to expenses of $43,944,734.

“The numbers won’t be official until the audit is completed, but that would put us at a loss of $1.8 million for 2018-19,” Denicola said. “When you look at the object areas, such as contracted services or supplies, for example, we overspent in just about every category.”

A larger deficit is currently projected for 2019-20 based on budgeted numbers. Lehighton’s 2019-20 budget calls for revenue of $41,361,426, compared to expenses of $43,894,495.

Denicola said the district did get a one-time revenue, $418,974, from the sale of Franklin Elementary School, bringing the projected shortfall to $2,111,095.

Lehighton’s business office, she said, remains hopeful the number can come down through a review of all expenses.

“We’re actively looking at every purchase order, every contract to see what expenses we can reduce to get that shortfall down,” Denicola said. “One thing we can also do as a district is put pressure on the state to adequately fund us.

“We’ve been looking at every subsidy number to make sure the data the state used to get to that number is correct. We had an issue previously with the special education numbers, but that has been corrected.”

Richard Beltz, school board director and finance committee member, said salaries and benefits are the biggest district expense each year. He suggested the business office create a proposal of what cuts to salaries and benefits would be needed over a four-year period to get Lehighton’s shortfall down to zero.

“I think we should try to solve this thing ourselves before we wait for the state to do something,” Beltz said.

Director David Bradley said it’s his belief the district has “an obvious consumption problem.” He blamed the finance committee and the full school board, which he is a member of, for a lack of oversight on administrative spending.

“The keys are given to the administration on a regular basis with no control,” Bradley said. “This board has the responsibility to show up and give no more to the administration than they need or that the district has budgeted for. This district’s budget is almost as big as Carbon County’s budget. Any benefits beyond what the state requires us to give our students is a luxury.”

Beltz offered Bradley his seat at the finance committee table.

“I listen to the experts and try to make the best decision I can based on that information,” Beltz said of his actions on the committee.

Bradley argued that Beltz had the capability to make decisions on his own, calling it just like managing home finances.

“If you’re at home and you’re spending more than you take in, you adjust,” Bradley said. “Maybe you turn the thermostat down or change your eating habits.”

Lehighton Superintendent Jonathan Cleaver said the comparison wasn’t fair.

“Your home doesn’t have unfunded mandates from the state or an insurance claim from an employee here or there that can really impact a budget,” Cleaver. “It’s not the same at all.”

When the 2018-19 audit is released, Cleaver said, the district will take a deeper dive into the numbers.

“Right now,” he said, “we’re making a good-faith effort every day to improve things.”

Budget transfers

Denicola said Monday the finance committee will get presentations on proposed budget transfers throughout the year.

“I don’t think that is something that has been done in the past here,” Denicola said. “Most districts routinely do budget transfers throughout the year.”

Transfers are allowed when a district, for example, budgets money for the facilities object code at the beginning of the year, but finds it would be better used under the instruction object code later.

“Budget transfers are allowed by School Code beginning Oct. 1,” Denicola said. “They have to be approved by the board. It helps you build a stronger budget throughout the year.”