The Lincoln County School District is in good financial shape for the upcoming school year despite a budget that anticipates higher spending than incoming revenue.

Cheryl Shelby, LCSD business manager, said there are two major factors relating to the upcoming 2013-2014 budget for the school district. The most important is that, in addition to incoming revenue, the district also has $14.9 million on hand.

“We would not budget the money if we did not have the dollars on hand,” Shelby said.

The second factor includes the cost to complete construction on the two new gyms at Bogue Chitto and Enterprise. Both of these projects result in an expenditure that has no corresponding revenue. Shelby said the construction is being paid for with money saved by the district over the years.

“We didn’t have to issue any debt to construct the gyms, which is an accomplishment,” she said.

The overall budget for the 2013-2014 school year anticipates total spending to be $28.3 million and total revenue at $24 million.

With close to $15 million in the bank, LCSD Superintendent Terry Brister emphasized the financial stability of the district.

“We are in as a good of a position as we’ve ever been in,” Brister said. “Business Manager Cheryl Shelby and our board have done an outstanding job, and we’re fiscally sound.”

Regarding the operational budget, which includes teacher and principal salaries, maintenance of the buildings and school supplies, not too much changes with the new budget.

Shelby said she has about $75,000 less than last year, but the shortage had little effect on the $18 million operational budget. The Mississippi Adequate Education Program (state-level funds) and ad valorem taxes (local funds) fund about 96 percent of the operational budget.

Federal funds saw the greatest decrease for next year, but Shelby said these funds are different from state and local funds, in that they go toward specific programs. Without the federal funds, the district does not do the program. If one program supplied money to buy a specific item and it was cut, the school just will not buy the item.

“If you don’t get the revenue, you don’t do the project,” Shelby said.

Another source of revenue for the district comes from 16th Section lands. Shelby explained there are two categories for these funds: 1) principal revenue, received from non-recurring sales, and 2) interest revenue, received from recurring sales. Principal cash comes from the sale of gravel or oil, resources that have a finite amount.

Interest cash comes from leases or the sale of timber. Principal earnings cannot be spent, but interest earnings can.

The interest earnings generally pay for non-recurring costs. Shelby gave the example that in a typical year the district may buy three new school buses, but if timber sales are up, they might use that money to buy six new buses.

However, she stressed that this money – because it can be hard to predict the amount that will come in – is not necessary to pay for day-to-day activities.

Money earned from nonrenewable resources, such as gravel or oil, is placed into a principal fund, which by law cannot be spent.

While the district has managed to deal with a reduction in costs this year, Shelby said it is increasingly difficult each year. When looking at the numbers since 2009, the state has decreased funding while increasing costs to the districts.

In 2009, the district received $13.8 million, and this year they will receive $13.2 million. Meanwhile, the cost of fringe benefits, which are comprised of insurance and retirement costs, have increased from $2.2 million in 2009 to an expected $2.9 million in 2013. The continual cuts make Shelby’s job difficult because there is not much that can be done to raise revenue.

“At some point, you hope the legislature realizes you can’t increase requirements and keep decreasing funding and expect a successful public school,” she said.

Shelby insists the district is trying to be as efficient as possible.

“There’s not a lot of fluff anywhere,” she said. “We don’t have a lot of the positions of other districts. We have people that wear more hats.”

Shelby gave the example of Assistant Superintendent Letha Presley, who is also federal programs director and special education director. She said the employees of the district work hard and assume multiple responsibilities for the betterment of the school system.

“We get a lot out of the staff we have,” she said.

Shelby said federal funds have not all been confirmed for next year. The majority have, but the few that have not are being estimated at 85 percent of the amount received for the 2012-2013 school year.

Shelby said when budgeting on the district level, district officials strive to be as conservative as possible. They estimate low funding and high expenditures. High expenditures allow money to be available in case of emergencies.