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NC public schools face mounting financial pressures. Meet the CFOs who guide the ship.

Willena Richardson and Jeremy Teetor have both stepped in to serve as Chief Financial Officers for public school districts that have struggled to hire a permanent administrator for the job. (Photo by Liz Schlemmer, WUNC)
Willena Richardson and Jeremy Teetor have both stepped in to serve as Chief Financial Officers for public school districts that have struggled to hire a permanent administrator for the job. (Photo by Liz Schlemmer, WUNC)

If you're a parent, you can probably name your kid's math teacher and maybe the bus driver or school superintendent — and you'd likely notice if they left their jobs. But what about the district's chief financial officer?

This story was reported and written by WUNC

After a bout of high turnover, there are 15 interim CFOs around the state, according to the  North Carolina Association of School Business Officials.

To help fill in the knowledge gap, veteran CFOs like Jeremy Teetor are trying to help. Northampton County Schools hired him as a contract consultant to help the district when they had a vacancy. Eventually, the district simply offered him the job.

“The superintendent said, ‘Well, you're putting in so much time anyway, why not just come on payroll, and be our finance officer of record?’” Teetor explained.

Teetor also drives to Hoke County about once a week to mentor their interim CFO Willena Richardson as she learns the ropes. Richardson has worked in the district’s small finance office for years, handling bank statements — but not the district’s $73 million budget.

“As you're sitting in the assistant finance officer seat, a lot of things you don't see, you're not privy to,” Richardson said with a chuckle. “I feel like the scales have been taken off my eyes, so I can never go back to the innocent assistant finance officer that I was.”

The growth of school choice is pinching school budgets, and it’s hard to plan for

Teetor helps Richardson deal with all the complicated intricacies of the job. For example, the district has been losing student enrollment for various reasons, but the one he can quantify is students moving to charter schools.

Teetor tapped on a calculator to determine how much that has affected the school district’s funding. The result is $4.1 million in state dollars, and $426,000 of local dollars, not including other federal funding streams based on enrollment.

“So, you're looking at over $4.5 million,” Teetor said.

Years ago, that funding would have gone to Hoke County Schools, but now funnels through the school district to area charter schools. The amount is based on enrollment, and it follows the students when they switch schools.

“I see them come in and out,” Richardson said. “Some will say ‘I'm going to this charter school,’ then they'll come back midyear.”

But not all the money follows them back.

“The local money does, not the state money,” Richardson explained.

That’s just one example of how complex school funding can be. Schools are funded by state, local and federal funds. It comes in different buckets for specific needs, and often can't be moved around.

Schools receive funds at the start of the school year based on their expected enrollment, then some of those funds can be taken away if not as many students show up, which is what happened in Hoke County this year.

“So, now you have to look at your budget and say, ‘Well, how am I going to pay this? Where do you cut to make sure the students are still getting what they need?’” Richardson said.

It serves to reason that if the school district has fewer students, it would need less funding. But Richardson said the daily realities are not that simple.

“There's not enough students that have left to make us need less money. We still need the same amount of teachers,” Richardson said.

She explained that it’s not like the district lost only fifth graders, so now they need fewer fifth grade teachers this year. The students that left are all across the district and from all grades.

The fluctuation in state funding Hoke County Schools saw this year was equal to the funding for about ten positions, or roughly $1 million in salary and benefits. But since it happened in the middle of the year, instead of firing school employees, the district put a hiring freeze on vacant positions. That system for basing August funding on enrollment projections is soon changing, and Teetor said, with good reason.

“Any business in the private sector, if you had a million dollar shift in your revenue occur mid-year, no one would really want to deal with that,” Teetor said.

School administrators don’t know yet how much the state’s expansion of private school vouchers may affect their enrollment and funding because scholarship awards for next year haven’t been finalized yet. The nonpartisan  Office of State Budget Management estimated that within a few years, Hoke County Schools could lose 4% of its state funding due to voucher expansion, and Northampton could lose as much as 8% of its state funding.

And in smaller districts like these, Teetor said there’s often only one person dealing with these financial changes.

“In most districts, the finance officer is the only person with financial knowledge," Teetor said. “I don't think people realize just how fragile it is. So, you're one vacancy away from payroll not happening — very, very seriously.”

School districts are often the largest employer in the county, especially in rural areas. While there might be one or two people running the budget in Hoke County, in places like Wake County Schools there are large teams handling payroll for nearly 20,000 employees.

The looming ‘cliff’ as federal COVID relief funding to schools expires

Mark Winters used to head that team at Wake County Schools. NCASBO receives state funding to run a mentorship program for new school CFOs. After Winters retired, the association called him to help Alamance-Burlington Schools with its budget crunch. The district spent down its rainy-day fund after paying to clean up a mold problem, but Winters doesn't blame the districts' finance team for the troubles.

“I can’t really say that it’s overspending,” Winters said.

Instead, he lists a variety of pressures many schools are dealing with right now.

“Inflation … utility rates … trying to use local funds to replace federal dollars that have been used over the past few years,” Winters said.

During the pandemic, public schools received a massive influx of federal funding called Elementary and Secondary School Emergency Relief, or ESSER. That funding ends this fall. Education insiders call it the ESSER cliff. Winters says he doesn’t like that term.

“I think of Wile E. Coyote falling off the cliff and with no parachute, so I don't think we're quite that drastic,” Winters says.

Winters said school administrators knew for years that this flush of federal relief money was temporary. Still, many school districts used it to hire nurses, social workers and school counselors. Because, Winters said, schools needed them.

Next year, schools will have to let those staff go or find another way to pay for them. Winters said the loss of federal relief funds is the main reason some districts are in a pinch.

“I think across the state, you'll see districts struggling, and there was no mismanagement,” Winters said. “It's just the fact of what we're facing.”

How well each school district handles the changing winds may depend on how savvy their CFO is.