The Montgomery County Board of Supervisors has approved a special emergency appropriation of $3.5 million to cover a deficit faced by county schools.
Last week by a 7-0 vote, supervisors allocated the amount after an explanation of why the situation happened.
Superintendent Dr. Kelly Guempel, who assumed the position in February, was very apologetic about the whole matter at a meeting that could have been “emotionally charged” but instead was very calm in nature.
The school superintendent previously served as the chief of schools for Spotsylvania County and called the situation a mistake by his administration.
“Moving forward, we must make sure it never happens again,” he said.
County administrator Angie Hill said the reason for the shortfall was an internal spending failure.
“This situation is not related to the state or federal budget, the Christiansburg High School renovation, or any other capital projects. The situation is also not related to grant reimbursements that were expected before the close of the fiscal year,” she said.
Guempel took ownership for the shortfall and said moving forward, he would make sure it never happens again.
As part of the process, he has contacted former Montgomery County Administrator Craig Meadows in hopes of doing a future audit that will tell both bodies what really happened. He also hopes to have oversight committees in place to begin next fiscal year.
“There is no excuse for this,” he said.
Meadows is no stranger to doing a financial audit and recently worked with the City of Radford in a similar situation.
Guempel and School Director of Finance Angie Bland told supervisors there was some inclination that they were trending in the deficit situation as early as May, but the school system failed to alert the county administration until this week there would a shortfall.
“Yes, we should have come to the board in May,” Guempel said.
A June 24 meeting with county staff and MCPS staff fully revealed MCPS would exceed their legal spending authority for fiscal year 2025-26.
“County staff asked MCPS staff whether any expenditures could be deferred until July 1 without affecting employee payroll. Reducing the immediate funding need below the public hearing threshold would allow us to address the situation while remaining in compliance with the requirements of the Code of Virginia,” said Hill.
“County finance staff assisted MCPS staff in identifying which obligations had to be paid before the end of the fiscal year and which could be deferred until July 1. Throughout this process, our focus remained on two objectives: ensuring that MCPS employees were paid on time and maintaining compliance with state law,” said Hill.
When questioned, Bland said a lot of the shortfall was associated with the lack of grant monies not coming in before the end of FY 2025-26.
Outstanding grants, Bland said, totaled just over $1 million.
“The grant monies have started coming in this week and will after July 1,” she said.
The question now is whether the whole situation violated a state statue.
Under Code of Virginia Code of Virginia, Title 22.1 – Education, Chapter 8 – Public School Funds:
“No school board shall expend or contract to expend, in any fiscal year, any sum of money in excess of the funds available for school purposes for that fiscal year without the consent of the governing body or bodies appropriating funds to the school board. Any member of a school board or any division superintendent or other school officer violating, causing to be violated or voting to violate any provision of this section shall be guilty of malfeasance in office.”
County officials believe the special appropriation took care of this need.
Last week’s special appropriation by the Montgomery County also includes language that the county general budget will be reimbursed once the grant monies are received. Approximately $2 million will come from grant monies associated with this year’s grant funding with the remaining amount having to be from FY2026-2027 revenue.
The school budget is 67 percent of the overall county budget with this past year’s operating budget being just over $158 million total. The county has increased the budget for schools every year since 2022.