HSA Shortfall to Be Covered by Savings; Financial Reforms Detailed

Dear Lafayette Families,

Thank you to all who participated in last night’s HSA meeting on financial reforms and this year’s projected budget shortfall due to reduced membership donations. For those who were unable to make it, we wanted to update you on the changes discussed that are designed to leave the HSA in a stronger financial position.  

As we announced last week, the HSA is $68,000 short of its membership fundraising goal of $150,000 for this year. Members decided by a vote of 46 to 4 to address the shortfall by tapping into HSA savings, rather than cut programming to benefit students and teachers.  

Due to legacy budget surpluses, the HSA entered this school year with a cash balance of $280,000. We will cover our shortfall with these cash reserves, which could draw the balance down to approximately $212,000 at the end of this fiscal year. Maintaining reserves that can cover several months of operating costs is an important function for the HSA’s fiscal health and to ensure we can meet our contractual obligations to fund instructional support and other commitments. 

The amount the HSA has to use from reserves could be offset by additional donations and fundraising efforts remaining this year, including the March 17 auction and the brick sale. We encourage parents to attend the auction and to contribute membership donations to support the programs that benefit all our students. 

Last night the board also proposed a series of financial reforms designed to prevent the type of theft that the HSA has recently experienced from ever occurring again. The new measures, which can be viewed here, include 29 policies that will strengthen controls over the HSA’s financial accounts. Among the improvements are:

  • A requirement for two signatories on all transfers and withdrawals
  • A ban on credit and debit cards associated with HSA accounts
  • A limit on the number of officers with access to financial accounts
  • A 1-day deadline for cash deposits and a 5-day deadline for check deposits
  • Monthly account reconciliations presented at board meetings
  • An annual financial report and account reconciliation each semester reported to membership
  • A formal accounting and bylaw compliance audit every two-three years

While most of these reforms were announced in August upon the discovery of the theft and have already been implemented, some will need to be formalized in the organization’s bylaws as a permanent change. Members are invited to weigh in with comments or suggestions and will need to vote to approve the bylaw changes at an upcoming general meeting.

The HSA’s next priority is addressing the 2018-2019 budget, which will need to reflect a reduction in anticipated fundraising with lower spending levels for next year. Principal Broquard informed the general meeting that Lafayette’s enrollment is predicted to grow to 854 next year – an increase of about 40 students, continuing steady annual enrollment growth in recent years. She said she’s hoping Lafayette’s per pupil funding from the city also will rise, but she’s still waiting to get that figure. Principal Broquard said if the per pupil funding does not increase, it will be a great challenge to meet the rising cost of staff and supplies to keep up with our rapid growth.

Given all these changes, we urge members to participate in the following upcoming HSA meetings to help determine our financial priorities going forward: 

  • February 15 – Small group meeting to discuss HSA budget
  • March 1 – General meeting where the HSA budget draft will be presented
  • March 6 – Small group meeting on the HSA budget

The proposed budget will then have a 30-day review and comment period. A vote on the final HSA budget for next school year will be at the May 3 general meeting. 

Although our organization has had to face tough realities this year, it is our hope the resulting reforms are a legacy that will benefit the HSA and our entire community well into the future. Thank you for your support of this process and our school,

-The HSA Board