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10/13/2020 02:42 PMAlthough all employees were paid their base salary when schools were shut down for in-person learning in the spring, the Supervision District of Regional School District 4 (R4) saw an unanticipated number of employee claims for unemployment in fiscal year 2019-’20 (FY 20), according to R4 Finance Director Kelly Sterner.
At the Supervision District Committee’s special meeting on Sept. 30, members approved a transfer of $4,500 in funds from the professional services line item to the unemployment compensation line item to cover the costs of these claims.
At the meeting, Sterner referenced a July 17 memo to Superintendent of Schools Brian White in which she discussed a $2,065 deficit in the unemployment compensation line and the need to cover a $1,466 invoice for the March, April, and May time period without incurring late fees.
The amount was increased to $4,500 in anticipation of increased unemployment claims for the month of June, according to Sterner.
“Now most years we come out way ahead on this,” said Sterner. “We have very low claims. We have very low costs in this category, but with the stay-at-home order and even though we were paying people their base salary, we did have an increase in the claims.”
Sterner explained to the Courier that these claims may be due to former recent employees being laid off from a new position, necessitating the district having to take a piece of their unemployment claims. Other employees may be working another job in addition to R4, which is another way that the district might be accountable for payments.
Instead of paying a quarterly amount for unemployment to the state, the Supervision District reimburses the state dollar-for-dollar on every claim. The state has been less timely processing some of the claims due to the massive number of residents filing for relief.
Sterner added that the state would be providing a 50 percent credit for the unemployment claims through the Coronavirus Aid, Relief, and Economic Security (CARES) Act and that the claims for June were lower than anticipated.
“It turns out that the June claims were down quite a bit, so right now, not a lot of concern on that budget line, but this could flare up again, and as a reimbursement in lieu of quarterly payment, it is something that we would have to deal with,” she said.
Other updates from Sterner included discussion related to year-end results for FY 20, the current status of fiscal year 2020-’21 (FY 21)and information related to the health insurance reserve fund.
The Supervision District ended FY 20 with a surplus of approximately $169,272, said Sterner. The main drivers of these savings were attributed to $86,000 in transportation under other purchased services and $29,000 in diesel fuel under supplies.
For FY 21, Sterner said that it’s too early to make any projections, and that the balances in the account are where they should be at this time.
“We see that 14.3 percent of the budget remains unspent or unencumbered,” said Sterner. “This is right in line with what we’re seeing across all of other school budgets. None of the budget lines are causing us concern right now, but we do anticipate that all available funds will be used by the end of the fiscal year.”
There was some discussion at the meeting related to how COVID-related expenses are tracked, with Supervision District Committee member John Stack expressing an interest in following expenses at a regional level as opposed to a facility level.
Superintendent of Schools Brian White provided information on how COVID expenses were being accounted for and said that for the most part, “it’s really going to come down to the administrative team’s awareness of where we have had to spend money and the things that weren’t a part of our planning.”
Sterner provided more details on how expenses for COVID needed to be tracked in the school districts, as the Supervision District is not eligible for grant funding.
“We have to keep it where the money eligibility is, where the awards are,” said Sterner. “So, we will certainly be tracking it along the way because we’ll need to for the grants in order to get the funding for it, but we will have to keep it at the school level.”
In addition to COVID expenses, the district is also monitoring the health insurance reserve fund closely. The fund reached a very low balance last fiscal year ($54,000) and was a major driver of budget increases across the district for FY 21.
Sterner said that the balance in the account hovers over the million dollars mark each month, but that COVID-19 may have delayed certain elective procedures for participants and that claims are running below the expected level.
“We do feel that the adequate premium levels and the supplemental contributions have really improved the financial adequacy of the account, but we will see when health care reopens fully what the impact is and how we land,” said Sterner.
The district plans to issue a request for proposals (RFP) this month to explore different options for insurance services that might be more cost-effective.