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Rio Rancho school district says state taking too much money

RIO RANCHO, N.M. — The New Mexico Public Education Department is using “completely inappropriate accounting” to calculate how much to take from Rio Rancho Public Schools’ cash reserves, according to district administrators, who believe the state is pulling about $800,000 more than it is owed.

A little over a week ago, RRPS learned that it would lose $2.3 million in the cash balance sweep Gov. Susana Martinez approved this January — a substantially larger amount than the $1.5 million the district projected.

Randy Evans

Randy Evans

Randy Evans, RRPS executive director of finance, told the school board Monday that the discrepancy comes down to “completely inappropriate accounting” that is unprecedented in his 30-year career.

“This is very serious,” Evans said. “I don’t think we can sit around.”

At issue is how much cash the school district really has in hand.

Across the state, districts lost a portion of cash reserves, adding up to $46 million to help cover a massive budget deficit.

According to the state, RRPS has $9.1 million in cash balances, but Evans argues for a smaller amount, $5.1 million. His figure subtracts liabilities like accounts payable; in other words, money that is already obligated for specific expenses.

Evans compared the formula to a simple family budget: if you have $10,000 in the bank, but just wrote a $4,000 check, you really only have $6,000.

“My opinion is that (PED) is not looking at this with proper accounting,” Evans told the Journal, adding that the district’s independent accounting firm agrees.

New Mexico Education Secretary Hanna Skandera said the bill is clear. It repeatedly

Hanna Skandera

Hanna Skandera

references a district’s “audited fiscal year 2016 operational fund balance” as the starting point for the calculation. That number does not factor in expenses, under PED’s interpretation.

“Every school is subject to the same calculation as Rio Rancho,” Skandera said in a prepared statement. “This is not an accounting issue they are bringing up. Rio Rancho is refusing to read the bill as it is written.”

Neighboring Albuquerque Public Schools accurately projected the amount it would lose in the cash sweep — $12.5 million, according to spokeswoman Johanna King. APS has settled its budget for the current fiscal year, King said.

But RRPS spokeswoman Beth Pendergrass reiterated that the bill is open to interpretation because an audited fund balance could legitimately exclude expenses.

“All we want is clarification and that is really what we are working on,” Pendergrass added.

The district will also start thinking about how to cover the extra $800,000 reduction. It’s one more hit for schools that are already strapped, Pendergrass said.

“This year has been very difficult,” she said. “There are tough decisions that have to be made.”

In addition to the $2.3 million cash balance reduction, RRPS lost another $2.3 million from operational funds last October.

Martinez has called for a special session to set the budget for next year, which begins July 1.

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