Chariho Surplus as a Result of Good Management

The following Letter to the Editor by Richard Hosp was printed in local newspapers and is printed here with the permission of the author

There have been quite a few negative letters and other communications about the Chariho Regional District School budget and clearly it has had an impact since two of the three towns have rejected the budget three times.

There is a belief that a “surplus” every year (meaning that the entire approved budget was not spent) shows that the budget can and should be cut.  As one very negative letter pointed out, the “surplus” over the last seven years has averaged almost $2 million a year.

It would seem that recurring surpluses could be the result of either bad budget planning or good management of the school system, or both.

It should be at least considered that the surpluses are the result of good management, especially since the compounded budget increase during those seven years was 15.77% while the compounded consumer price index increase for the same period was 16.96%.  In other words, the Chariho budgets have not kept pace with inflation.  That would seem to be a vote for the good management side.

Why is it that folks believe that a surplus is bad?  It is odd because, if one were to do a household budget and came in at the end of the year spending less, most people would celebrate. Nobody takes the unspent household budget money away.  It usually gets saved or spent on household needs the following year.

Why is it that the school budget surplus is not viewed in the same way?  It is Chariho School Committee policy to maintain a fund of between two and four percent of the budget for unforeseeable problems, like the Hope Valley School exterior brick project. The rest is used to reduce the District’s bill to the towns for following year’s budget.

So perhaps the surplus is a result of good management, but also the result of bad budget planning.  Well, $2 million is about 3.5% of the Chariho School system’s total proposed budget.   It is a complicated school system involving seven separate schools, not counting special programs.  It would seem that 3.5% is a fairly small margin of error. Consider that it cannot be plus or minus 3.5%.  Exceeding the budget is not an option.  Management must come in at or below budget.  This really doesn’t seem like bad budget planning.

If I were a child at Chariho, I would be concerned that two of the three towns either don’t understand how things work or don’t care about my education and school experience.

Richard Hosp