Prince George school board flags FY26 overruns as health-care, substitute costs climb

Finance staff presented the district's year-end picture for fiscal 2026, reporting revenue received at 97.8% and overall expenditures at 98.6% while pointing to several line-item overruns that will affect planning for FY27.

"If we look at the revenue page, you will see that overall we have received 97.8% of our revenue this year compared to 97.2% last year. That's a $4,400,000 increase year over year," Finance staff (Miss Smith) told the board. She later summarized major pressures: "Our healthcare costs are 753,000 over budget this year" and "the total cost of substitutes this year is $730,000 over budget."

The presentation attributed some substitute overage to long‑term substitute pay when employees were on extended leave and to underbudgeting in prior years. Summer-school salary costs also exceeded the line-item projection, and encumbrance accounting during a Munis outage complicated month‑end projections.

Staff described how a one-time state bonus of $1.2 million and other adjustments reshaped fund balances and said the current projection shows a modest year‑end underrun of just over $300,000. Finance staff recommended using any remaining new revenue to cover mandated employer fees and recommended increases in SPED contracted services and the EPF/retirement fee, which they estimated would leave a shortfall if not addressed.

"My recommendation is that we would utilize any extra money to cover the EPF fee," Miss Smith said, explaining an estimate of $714,000 and a projected shortfall in the FY27 budget for that line.

Board members debated priorities for any available funding and emphasized tighter monitoring and improved encumbrance tracking. Staff said they are revising salary schedules and rolling updated figures into the FY27 spreadsheet this week and asked the board for a consensus to request the additional county appropriation tied to a 2% state pay supplement; staff noted the county will act on its appropriation schedule later in July.

The board heard that, despite the overruns in specific areas, the district was not in a net deficit for FY26 because transfers and one-time state funds covered gaps. Staff said FY27 will be tighter and signaled that additional policy and tracking improvements will be necessary to manage substitute and healthcare costs.