The Coventry Local School District should dramatically cut the number of out-of-district students it accepts in order to balance its finances, a state audit recommends.
Reducing the number of out-of-district students, along with other recommendations from the state auditor’s office, could save the financially troubled Coventry district $1.8 million annually, the state auditor’s office said Tuesday.
Coventry had 782 open enrollment students during its 2014-15 fiscal year, the state report said.
The report recommends two scenarios that would allow 58 or 116 students from other districts.
The district has 2,076 students; open enrollment students make up 37.7 percent.
Auditors found a resident student generates an average of $9,867 in state and local revenue for Coventry, compared to $5,997 in state-revenue only for each open enrollment student. Local tax dollars don’t follow the student out of the home district.
“If managed properly, open enrollment can offer struggling school districts a gateway to healthier finances and provide families important educational options,” Auditor David Yost said in a statement. “But if you open the flood gates without a practical plan and reasonable limits, your finances will have a tough time staying afloat.”
The 51-page report also said the district should look into reducing staffing to state minimum levels, renegotiate union contracts and take other steps to reduce expenses.
The audit is a result of state government last year downgrading debt-heavy Coventry Local Schools to fiscal emergency after a record 18 years of being on fiscal watch.
Coventry schools will take a “hard look” at the recommendations in upcoming months, Superintendent Russell Chaboudy said.
The district is not required to enact any of the audit recommendations but does take the report seriously, he said. State auditors have been meeting with district officials on a regular basis.
“We appreciate the work on it,” Chaboudy said.
Don’t expect the district to immediately prevent more than 700 open enrollment students from going to Coventry schools, Chaboudy said.
“That would certainly change the landscape of our school district. … To do that, you are going to cost a lot of programs and opportunities for kids,” he said.
Administrators and school board members will discuss the audit report and get insight and recommendations from other educational groups, Chaboudy said.
The auditor’s office encouraged the district to do its own assessment. The school district already has committees looking into many of the issues raised in the state report, Chaboudy said.
The district’s main goal is not to have a new levy and to avoid major cuts, he said.
Reducing general education staffing to state minimums “is not a common practice in Ohio, but may be necessary to maintain financial solvency based on the deficit projections in the October 2015 five-year forecast and fiscal emergency status,” the state report says.
Although the audit report suggests reducing staffing, Chaboudy said he believes the district is already understaffed.
“We think we can come out of this financial problem on our own,” he said.
The district also paid a transportation company about $68,400 in the 2015-16 school year for three out of 24 bus routes it did not use, the audit found.
By reducing open enrollment to a level that maximizes staff resources, the district could reduce expenditures by almost $1.6 million annually, the report said.
The report recommends the district establish open enrollment capacity limits by grade level, school building and/or educational program.
Based on fiscal year 2015-16 data, the district could admit 116 open enrollment students if it increases its total student-to-general-education-teacher ratio to 25:1.
If the district maintains its current 21:1 ratio, it could admit 58 open enrollment students. That option would limit the revenue the district receives from open enrollment, the state said.
According to the state report, the resulting savings could go toward reducing debt payments, educating students and offsetting the reduction in state revenue to pay back State Solvency Assistance funds.
The state said the district ended its 2015-16 fiscal year with a deficit of about $4.8 million.
The state auditor said the district’s October 2015 five-year forecast projected a cumulative deficit totaling more than $5.9 million by fiscal 2019-20 if left unaddressed while including renewal/replacement levies.
The district’s updated May 2016 forecast projects a reduced negative ending fund balance for the first four years of the period, but an increased negative ending fund balance of $7.1 million, excluding a renewal/replacement levy.
If the district implements the audit report recommendations and voters approve a renewal/replacement levy, the final ending fund balance in fiscal 2019-20 would be an estimated $2.9 million, according to the press release.
If voters do not approve the levy but the district implements the report’s recommendations, the deficit projected in fiscal 2019-20 would be reduced to $1.4 million.
Coventry has the most open-enrolled students out of Ohio’s 609 school districts. The district, using a state-approved law, has brought in mostly white, high-performing students from South Akron.
There are 630 students from Akron Public Schools who are open enrolled in Coventry, according to Akron district spokesman Mark Williamson. The Coventry school district received $3,334,774.80 during the 2015/2016 school year for the Akron residents.
Coventry is a property-rich but income-poor community, which has hurt the district under the state’s funding formula.
Jim Mackinnon can be reached at 330-996-3544 or jmackinnon@thebeaconjournal.com. Follow him @JimMackinnonABJ on Twitter or www.facebook.com/JimMackinnonABJ