Audit warns St. Charles Parish schools of multi‑year structural deficit; board weighing short‑term financing

Eisner Amper consultant Tom Frio told the Finance & Audit Committee on June 22 that a three‑phase review of St. Charles Parish Schools found a structural operating deficit if current trends continue and that cash reserves could be exhausted within two to three years.

"Across the forecast period," Frio said, "we estimate a recurring shortfall in the $48 million to $64 million range if nothing else changes." He added that the district’s largest recurring expense is payroll, which currently consumes roughly 65% of revenues and may approach 70% in the forecast period.

The forecast presented a steep cash decline under a no‑change scenario: district cash fell from about $100 million in February to roughly $53 million at the end of FY26 in the model, to about $14 million at the end of FY27 and potentially negative by the end of FY28. Frio cautioned that the projection is a straight‑line scenario and does not assume corrective actions.

Why it matters: a pronounced cash shortfall would force the district to choose between steep expenditure reductions, delayed capital projects, or short‑term borrowing. District staff told the committee they have already pursued temporary financing options to manage near‑term liquidity.

"The notes and bonds give you flexibility and time to do that correctly," Frio said, describing the district’s authorization of sales‑tax bonds and revenue‑anticipation notes to smooth cash timing differences. Committee discussion noted the board previously authorized a $30 million sales‑tax bond issue and up to $35 million in revenue anticipation borrowing to address short‑term needs.

Eisner Amper recommended several operational and accounting changes to restore fund‑level visibility and improve monitoring: move from year‑end adjustments to monthly or quarterly reconciliations, maintain separate bank accounts for debt service and bond receipts, lock board‑approved budgets in the financial system, charge payroll directly to the funds that incur it, and add detailed project‑level reporting for construction projects.

Administration said it has begun implementing recommendations and will codify them in policy and procedure for board consideration. CFO Mr. Neighbors said staff already has taken steps such as separating bond millage receipts into a dedicated account and improving capital‑project monitoring.

Next steps: the administration will present revised policies and procedures, and the board will consider the interim budget and financing items at the full board meeting scheduled Wednesday. The consultant and staff stressed the forecast is a planning tool: without policy changes and operational cuts, the modeled cash path could worsen.

No forensic audit recommended: Eisner Amper told the committee its review found no indications of misappropriation that would have triggered a forensic audit. "Our findings did not indicate potential misappropriation of funds," Frio said.

The committee did not take a final vote on programmatic cuts or structural adjustments; it directed staff to bring policy language and implementation steps back to the board for formal action.