Spearman Declares Fiscal Emergency in Sumter School District

Columbia, S.C. - State Superintendent of Education Molly Spearman has declared a fiscal emergency in the Sumter School District due to non-compliance with the district's financial recovery plan and the possibility of further fiscal decline.

"Decisions that put the financial stability of a school district at risk and put the education of students and tax dollars of the public in jeopardy cannot be tolerated," said State Superintendent of Education Molly Spearman. "The Sumter School Board made a conscientious effort last year to fix the financial crossroads that it found itself in but recent decision making by the Board has undermined that effort. I am committed and bound to intervene through a fiscal emergency to ensure the best interests of the students, parents, and Sumter community are being served. We will work quickly and diligently to move the district in the right direction."

In May of 2017, Governor McMaster signed into law legislation creating the Statewide Program on District Fiscal Practices and Budgetary Conditions. The legislation sets forth escalating levels of fiscal and budgetary concern under which the State Superintendent may or must declare that level of concern and put into place conditions to rectify the district's fiscal and budgetary conditions. The three levels are fiscal watch, fiscal caution, and fiscal emergency.

On March 19, 2018, the Sumter School District was placed on fiscal caution for failure to meet the Fiscal Year 2016-17 minimum general reserve fund balance. The district was placed under fiscal watch in 2017 after an investigation by the State Law Enforcement Division (SLED) as well as audit irregularities in the district’s use of funds under the Child Early Reading Development and Education Program (CERDEP) were discovered. The district publically declared a deficit during 2016-17 school year.

On February 14, 2019, after the Sumter School Board took action to schedule the reopening of Mayewood Middle for the 2019-20 school year, Superintendent Spearman sent a letter to the Board requesting that it submit an updated financial plan that includes the cost and impact of reopening the school and addressing an outstanding Individuals with Disabilities Education Act maintenance of effort finding. The previously submitted plan established benchmarks for increasing the district fund balance that did not contemplate the reopening of the previously closed school. Mayewood was previously consolidated with R.E. Davis Elementary school to form the new R.E. Davis College Preparatory Academy as part of the district's efforts to regain the minimum required fund balance and was a measure explicitly laid out in the district's original financial recovery plan while on fiscal caution status.

The Department received a response from the District on February 19, 2019 with the proposed financial plan. However, the plan failed to indicate the district would be able to reach a sustainable replenishment of the required minimum general reserve fund balance. The fiscal practices legislation requires that the State Superintendent declare a fiscal emergency in five situations:

Failure to submit an acceptable fiscal caution recovery plan
Failure to comply with a fiscal caution recovery plan
Risk of debt default
Three fiscal years of fiscal watch or caution
Necessary to correct fiscal problems

During the fiscal emergency, the Department will provide technical assistance in implementing proposals and make recommendations concerning the Board's recovery plan which must be submitted to the Department within sixty days. The Department is also required to visit and inspect districts under fiscal emergency.

As part of the fiscal emergency, the State Superintendent may recommend to the State Board of Education(SBE) that the state take over the district's financial operations for the remainder of the fiscal year and upon approval maintain financial operations until the district is released from fiscal emergency.

The Sumter Board may appeal to the SBE within ten days. The SBE must hold a hearing on the appeal within thirty days after the filing of the appeal. The district may only be released if the Department determines that corrective actions have been or are being successfully implemented and this cannot occur within the fiscal year in which the declaration was made.

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A copy of the fiscal emergency declaration letter can be found here.