FY 2009 Comprehensive Annual Financial Report - Harford County ...

Harford County Public Schools
unscathed. The reductions at the state continue into FY10 and we anticipate some, as yet to be
determined, impact to HCPS during the current year.
Long-term financial planning
In 2002 the state legislature enacted the Bridge to Excellence in Public Schools Act. This law
initiated major changes in the state financing of local schools in an effort to achieve both funding
equity and adequacy between Maryland‟s 24 school districts. The law achieved its promise of an
increase in state funding to public education of $1.3 billion over six years. However, the
governor of Maryland convened a special session of the Maryland general assembly in October
2007 to reduce the projected $1.5 billion state structural deficit. During the special session,
increases in taxes were approved and planned funding increases for public education were
curtailed through FY2011. As a result, increases in State Aid to the Unrestricted Budget will be
at a minimum growth of 1% over next year.
Relevant financial policies
Primary funding is provided by the State of Maryland and Harford County Government. The
budget is approved by the Board of Education and the Harford County Council in accordance
with state laws. The Board has no authority to levy and collect taxes or increase the budget.
Formal budgetary integration, including encumbrance accounting, is employed as a management
control device during the year for the governmental fund types. Management is authorized to
transfer funds within major categories of expenditure, as defined by statute. Transfers between
categories of expenditure during the fiscal year require approval of both the Board of Education
and Harford County Council.
By statute, in order to receive any increase in state basic school aid, each county must
appropriate an amount equal to, or greater than, the prior year per pupil appropriation. Referred
to as the „maintenance of effort‟ calculation, it provides that if there is no enrollment growth
county funding will remain the same as that of the prior year in terms of total dollars. Counties
often appropriate far in excess of the minimum amount stipulated in the law.
Capital projects are funded by Harford County Government and the State of Maryland. The
Board of Education has no authority to issue general obligation debt. Funds are budgeted and
appropriated on both a project and annual basis. Capital projects funds do not lapse at the end of
each year and may be expended until completion of the project. Budget transfers between
projects require the approval of both the Board of Education and the Harford County Council.
Major initiatives
Construction is underway for a replacement of Edgewood High School and the replacement of
Deerfield Elementary School. Planning is in process for an additional elementary school, Red
Pump Road Elementary School. The new elementary school will necessitate a comprehensive
redistricting in the coming years.
Magnet and completer school programs continue to expand.
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