SPENDING SPIRALS
Tue, 08/19/2025 - 1:29pm
admin
But who was watching?
By:
Amanda Mendez, publisher
In two fiscal years, the district's cash balance was down $3.96 million.
Questions, accusations and calls for resignations cast a pall on the beginning of the new 2025-26 school year. With $3.96 million bleeding from the local school district's cash reserves over the last two years, the taxpayers of the Willow Springs R-IV School District are demanding answers.
More troubling — the elected school-board members, by law responsible for the district's budget — are asking a lot of the same questions.
How did we get here?
The school district's operating-fund balance declined from 19 percent in 2024 to 4.96 percent as of June 30, 2025, the school board heard at its meeting last Monday, Aug. 11. Current district targets are 20 percent. Superintendent Dr. Marty Spence issued a statement on Aug. 5 disclosing a "critical" budget shortfall. The board at large was tensed for confrontation as School Board President Mac Gum opened the budget work session saying, "We have some very difficult issues to discuss."
Gum went on to warn the dozen or so members of the public present that there would be no dialogue during the meeting's public-comment period.
Spence began his presentation with an apology to the board.
"I would never purposely have done this ... but we're here, and it will never happen again," he said.
As previously reported by Howell County News, Spence blames a forecasting tool that he used, "erroneously," for failing to predict the cash-balance drop. He began walking the board through the numbers, offering decreased revenue and increased expenses as seen in Figure 1. Spence reported revenues were down $1.17 million and expenses were up $1.23 million, overall, in FY25 from FY24.
Cash on hand over this same period decreased $2.73 million. The previous year, the district's cash balance decreased $1.22 million. In two fiscal years, the district's cash balance was down $3.96 million. See Figure 2 above.
Over two-thirds of budget line-item categories overspent their FY25 budget, a shortfall of $2.6 million this year alone. See Figure 3 above.**
There is over-budget spending in all salary categories, except the middle school, but there is also more than $359,000 overspent budget on 1411- Student Activities. Account 2542, Care and Upkeep of Buildings, is over-spent by more than $837,000. The roof-repair project on the high school cost $600,000, as the board heard at its June meeting. Account 4051, Building Acquisition, Construction, and Improvement, also is in the red $409,000.
In the coming weeks, the News will be investigating spending in all these categories and any others with significant expense over their budgeted amounts. We will publish our findings in upcoming editions.
Budgets are adjusted as part of annual financial reviews in every taxpayer-funded entity. However, the drastic reduction in the actual cash balance is what prompted the district's Aug. 5 announcement — again a drop of $2.73 million.
"A cash-flow projection tool was erroneously used resulting in a false anticipated fund balance for (the) 2024-2025 and 2025-2026 (fiscal school years)," Spence's presentation read. It also mentioned the inclusion of ESSER (federal) funds in the budget that, "influenced recommendations to the Board of Education for recurring costs ..."
Meanwhile, the district's independent auditor told the board in January 2025 they would "be done in two years" if they kept spending at the same rate. The district's published general ledgers from that month show $10 million of the school's $15-million budget had been spent. By the end of the fiscal year, they had spent $18.22 million.
Where did it go?
The district hired an independent financial consultant, Dr. Carol Embree, retired deputy superintendent of operations for Springfield Public Schools, "to ascertain an accurate accounting of district finances." The figures presented at the August board meeting were figures audited by Dr. Embree. As of Aug. 12, the district "had not received any bills" for her services.
"So, all funds are accounted for?" School Board Vice President Matt Hobson asked.
"Yes, and you don't have to take my word for it. Dr. Embree combed over these figures," Spence answered.
The school board justifies the expense of a consultant at this time of budget crisis because it, "is not duplicating work but adding specialized expertise to ensure accuracy and objectivity ... This type of contract is how a Board can ensure we have the best possible data with which to make future decisions."
"While we respect [Dr. Spence's] honesty, external guidance is necessary to fully understand the scope of our challenges and the best path forward," said board representatives in an email to the News.
In the Aug. 11 meeting, the board wanted answers.
At the end of Spence's presentation, board member Adam Webb asked, "How did we miss the forecast this badly?"
"That would be me," Spence replied. "I trusted without verifying."
On Aug. 12, the school board announced Spence had informed them he would not be seeking extension of his contract. He will step down after the 2025-2026 school year. However, for the next 10 months, until his contract expires on June 30, 2026, Spence will remain the top official for the Willow Springs R-IV School District.
What about jobs?
Far and away, the district's biggest expense is the people they employ. In the first week of August, Spence told Howell County News the district employed 200 people. According to information presented at the Aug. 11 meeting, salary and benefit expenses have increased 25 percent in the last five years, with, reportedly, an increased overall expense of $2.5 million.
A, "number" of positions were eliminated for the 2025-2026 school year, "to begin addressing the financial gap, and other solutions will be identified to address this situation," reads Spence's presentation.
"I've spent my entire career here, and I don't remember a time when (the size of the staff) contracted," Spence said in the meeting. "2025 was the first time."
"The beginning," Gum added.
"There will be more," Spence agreed.
As the district attempts to curb spending now, certain staff members without contracts have been the first to go. Most teachers, and all administrators and directors, will remain on the payroll throughout the 2025-2026 school year because of contracts offered in March 2025.
At the August school board meeting, Hobson summarized, "We overspent, and the biggest culprit is staffing," confirming that because of contracts offered, "We're locked in where we're at on what it will cost to operate this year."
Many in the community have pointed to the district's 15 administrators with their combined wages of more than $1.2 million, just shy of 7 percent of the school's overall budget. See an upcoming issue of Howell County News for a full investigation into administrator salaries.
There is no indication yet which contract employees will not be asked back for the 2026-2027 school year.
"We are reviewing all staffing structures, including administration, to ensure responsible resource allocation," said board representatives in response to a question from the News.
Most of the discussion during the meeting centered on salary spending, but the board did not commit to a single cause, as a board statement read, "Our consultant will help us understand how a combination of evolving financial circumstances, inaccurate projections, and external economic pressures have created our current situation."
Revenue shortfalls
"Education funding changes quickly at the federal, state and local levels, and did so this summer. We are still learning of possible funding challenges," said board representatives in an e-mail to the News.
Declining enrollment is significant factor in state-level funding. In the last four years, enrollment has declined by 138 students overall. The biggest drop was from 2023-2024 to 2024-2025, when 65 students dropped off the rolls, but there has been a decline each of the last four years. According to information presented at the meeting, the State Adequacy Target (SAT) calculated the funding to educate each student in FY26 to be $7,145. The district does not lose seven thousand dollars for every child who unenrolls, but it receives funding based on their best enrollment numbers over the last three years. A steady decline over four consecutive years translates to an inevitable drop in funding.
Enrollment data for the upcoming school year is unavailable as of press time.
Board member accountability
Despite Spence's consistent message that he, alone, is to blame, many in the community are calling for school board members to explain themselves, if not resign. School-board members declined to answer media questions and sporadically answered public comments and questions at the Aug. 11 meeting. For questions from Howell County News, the board chose to respond by e-mail via two representatives — Gum and Hobson. At no point has a school-board member agreed to answer questions in person and on the record.
According to answers obtained in this manner, "Currently, no board members intend to resign."
They say the board was unaware of, "the full extent of the issues" until, "only recently."
The reserve balance of less than 5 percent, "became evident as part of the fiscal year end data review."
On whether there were warning signs, the representatives said, "Some indicators existed but did not reveal the depth of the current situation until recently."
If Spence knew earlier in the year how serious the budget problems were, he did not communicate it to them board. "We have ongoing communication with administration, but the full extent of the issues have become known only recently," says their e-mail.
Former school-board members were present at the meeting last Monday, Aug. 11, and pushed back on this idea.
"When I was on, we were at a 27-percent reserve," said Larry Rothermich, who served many years on the school board. "How in the world does the board allow this and not have some darn hard questions?"
Tony Friga, the school-board president whose board hired Spence, asked about cash-flow reports.
"We used to get a monthly general ledger in the board packet tracking items by line item," Friga said at the Aug. 11 meeting. "Is that something you look at? If you're not, you're not doing your job as a board to check on the superintendent."
In a follow-up interview last Friday, Friga explained that, in his experience, these reports are a monthly check point for district spending throughout the year.
"You can ask why we are here now, instead of relying on one big number," he said.
Friga, a school-board member for 15 years, has been vocal about the district's spending since at least January 2025, when the News quoted him telling the board, "This district has a spending problem."
Cutting costs on non-contract employees is, "kicking through the bushes looking for pennies," Friga said. He said it will not be enough to balance the spending.
While Friga is not advocating for board-member resignations, he said that he has advised the three members who are up for re-election in April to step down now if they do not plan to file for re-election.
"It's not right to help hire the new superintendent if you won't be around next term," he said.
Another former board member who was not present at the meeting, but has been vocal about the board's responsibility for the current situation, is Dean Aye.
"Marty can't make expenditures without board approval. That's the law of it, and the board is responsible for the budget. That's the law of it," Aye said in an interview last Friday. "Anyone who has been on that board more than 12 months is culpable."
Aye, who served on the board for six years, says he fears long-term repercussions for the district.
"It took three years to create this situation," Aye said. "It is going to be difficult to find a highly qualified superintendent to take over a district in distress. That person will be unpopular and unlikely to remain, meaning another new superintendent — and another $15,000 search. This will haunt us for six to nine years."
On their own behalf, representatives of the school board said in an e-mail, "We accept responsibility for overseeing the district's financial health and ensure the corrective measures are taken."
What now?
With Spence stepping down at the end of the school year, it remains to be seen who will be at the helm next year. Hiring and firing decisions are usually made around January, and the landscape of the 2026-2027 staff should be clearer at that time. The board has repeatedly promised transparency.
Their statement read, "We are committed to transparency, fiscal responsibility, and working diligently to restore stability while keeping parents, students, and voters informed as the new school year begins."
Using Dr. Embree's calculations, Spence reported the reserve balance should be up to 8 percent in FY26 with a cash balance of $1.27 million.
"As the Willow Springs School District moves forward, the school board and district will continue to provide transparent and informative communications, through press releases and board-meeting presentations as accurate information is obtained," said board representatives.
** These figures are sourced from budgeted numbers reported in the district's January 2025 general ledger and compared to actual expenditures as reported in the June 2025 general ledger. Lori Foster Logan was instrumental in preparing this report. Logan has led and managed budgets for multiple large-scale global transformation projects — one specific project she managed had a budget more than $50 million, and she has also driven cost-savings opportunities resulting in over $30 million in savings throughout her career. She was named twice as one of the Top 100 Women in Supply Chain by Digital Supply Chain Magazine for her accomplishments. A 1992 graduate of Willow Springs High School and the current owner of Pizza Americana in the city's downtown, Logan ran for Willow Springs R-IV Board of Education in April 25, but she was not elected.