‘POOR BUDGET PRACTICES’ to blame
Tue, 09/09/2025 - 11:40am
admin
By:
Amanda Mendez, publisher
After five weeks of investigation, interviews, and spreadsheets, there is no hint of financial corruption in the Willow Springs R-IV school district. There are no ten-thousand-dollar staplers tucked away in the records, no suspiciously lined pockets.
Employee wage records, however, show little evidence of the salary attrition that the district announced would occur to address too-heavy payrolls.
Maintaining a dialogue with Superintendent Dr. Marty Spence and the school board ultimately led to a Sunshine Law request for records of specific spending patterns, specifically salary spending. Before releasing those records, the school district sent a bill charging $99.55 for five hours of district employee time billed to fulfill this request. It was promptly paid, and Dr. Spence emailed the records.
And to answer a question after five weeks of asking, all signs point to poor budgeting practices, unaddressed for years by the school board, as the road that led the way to a school year that began with scarcely a million dollars in the bank.
Salary attrition?
Since the Aug. 5 announcement of a critically low reserve balance, the school board and superintendent have pointed to salaries as the key to begin spending with the district’s means. The initial announcements warned of salary attrition, and the board openly discussed a futured reduce staff size in the August 11 board meeting. That day, the board passed a $15.53 million budget for the new school year with a net decrease of $898,124 in total salary and benefit projections for the year.
Dr. Spence said in an Aug. 29 email to Howell County News that enrollment in the elementary school has dropped below an average of 80 students per grade level, “which is why positions were eliminated in that building.”
Enrollment has declined by 117 students since FY22, with the biggest drop of 65 students occurring between FY24 and FY25. Enrollment numbers for the current school year will be recorded this month. Spence said the trend of staff reduction will likely continue through the middle and high schools in the coming years.
According to employee wage records received on September 2, salary spending alone, not including benefits, is on pace to increase $316,000 this school year. At the end of FY25, the district had 194 employees overall, whose salaries total more than $7.39 million. According to the report from the school dated August 28, there are currently 196 employees whose salaries are projected to cost $8.25 million this year.
A year-to-year comparison of these records shows the district retained most individuals in positions except one custodian, one cafeteria worker, one part-time coach, two substitute or part-time teachers, one full-time substitute teacher, and three paraprofessionals – a savings of $141,000.
New faces in the district include four new teachers, one new substitute teacher and football coach, and two new paraprofessionals.
Records of employee resignations tracked by the News throughout FY25 show a net loss of seven teachers throughout that year. Moreover, certain staff turnover, such as the Special Education Administrator, Process Coordinator, and Speech Language Pathology assistant (SLPA), is not reflected in the FY25 employee list provided by the school. Those individuals, employed and resigned in FY25, are missing from the school’s list, which is a year-end report and would show employees and their salaries on the books as of June 30.
These positions have been filled. Two of them, according the St. Louis Post Dispatch’s public pay tool, have been filled at higher rates of pay than their predecessors. New employees in the role of the Special Education Administrator and Process Coordinator position are making a combined $9,858 more than the last employees. Information on the SLPA salaries was not available in the public pay tool for comparison.
The News’ Sunshine Law request asked for, “a payroll report reflecting funds dispensed to each and every employee,” in FY25 and FY26.
Records received, with the comparison spreadsheet prepared in the newsroom, will also be available at howellcountynews.com or by hard copy for free in the news office.
Board accountability
Under Missouri law, elected members of the school board are responsible for approving budgeted expenses and for overseeing the superintendent. Since the Aug. 5 announcement, Spence has consistently accepted sole responsibility for the budget and “faulty data” presented to the board.
Responding to questions by email about whether Spence is truly solely responsible, the board responded, “Financial challenges result from multiple factors; and the Board is actively involved in addressing them…we have ongoing communication with administration, but the full extent of the issues has become known only recently.”
On the responsibility the board accepts for the current state of finances, they replied, “We accept responsibility for overseeing the district’s financial health and ensure corrective measures are taken.”
As to how we got here, the board offered, “Our consultant will help us understand how a combination of evolving financial circumstances, inaccurate projections, and external economic pressures have created our current situation.”
As previously reported, the district hired Dr. Carol Embree to consult on the district’s finances while Spence remains employed through the current school year, finishing out his contract.
A review: critical reserve balance and over-spent budgets
Initial information from the school district sounded the alarm about a critically low reserve balance on August 5. Dr. Spence reported an audited cash balance of $861,193.69 as of July 1, the first day of the FY26 fiscal year. The previous year, that balance was $3.59 million.
On August 11, the explanation offered for the drop was lower revenues and higher expenses. Spence reported revenues were down $1.17 million and expenses were up $1.23 million, overall, in FY25 from FY24.
Cash on hand over this same period decreased $2.73 million. The previous year, the district's cash balance decreased $1.22 million. In two fiscal years, the district's cash balance was down $3.96 million.
A continued dialogue with Spence zeroed in on an improperly used cash flow model and budget forecasting tool as the reason for the balance drop. Spence told the board as much on Aug. 11 and reiterated the same message in emails to Howell County News.
Spence skirted questions about checking daily cash balances in those emails. Former school board members asked Spence on-record about the budget reports that should have been alerted board members, and the public, of the reality of a too-free pocketbook. The board did not answer.
As previously reported, spending outpaced the approved budget by $3.75 million in FY24, and by $2.65 million in FY25. The cash drop in FY24 was less noticeable because the shortfall of spending to income received was only $1.24 million. However, in FY25, the district received $2.64 million less than it spent.
An initial pass looking at year-over-year spending in these reports, called general ledgers, showed spending that did not match budgeted amounts recorded in the beginning of the fiscal year.
Poor Budgeting Practices
The News asked Spence to explain why budget amounts on the June 2025 general ledger report were edited from May to June, showing instead actual amounts spent instead of tracking the budget.
“Why not keep the budgeted amounts from earlier in the year and be clear about the overspending?” the News asked.
Spence replied in an August 29 email, “We’ve had poor budgeting practices in the past.”
There was significant over-budget spending on predictable and known expenses- namely salaries.
“We have taken steps to provide a stronger, more accurate budget,” he continued.
The News identified significant, meaning more than $600,000, over-budget spending for certified salaries alone. These sums, defined by employee contracts and the district’s step schedule, would have been determined months in advance of the preparation of the annual budget.
“We should have included those numbers in the budget preparation…See above on poor budgeting practices,” Spence explained.
Poor budget practices mean, in practice, there was no clear guideline about what should have been spent. Without an accurate budget to follow, overspending was not identified throughout the school year, either by the school board or by the public.
These practices have also prolonged this investigation.
For example, a review of the general ledger reads that student activities were in the red almost $400,000 last year. They were not. Each student activity was budgeted at only $100 for the year, with fundraising and spending tracked separately in student activity accounts. A Sunshine Law request yielded a chart of accounts report showing a year-end balance of $225,691. Though individual clubs and activities may have lost money, there is no evidence that extracurriculars have contributed to the cash balance drop.
In other budget categories, Spence pointed again to, “poor budget planning.” Interest payments on the roofing and HVAC loan taken out prior to Spence’s tenure are not entered as a budgeted expense in FY25 and contribute to the overall picture of overspending on known expenses.
A poorly prepared budget also gives the impression of apparent overspending in the Care and Upkeep of Buildings fund. According to the June 2025 general ledger, that fund is over-spent by $839,799. Predictable expenses like wages and property insurance are under-budgeted. Salaries cost $88,980 more than planned, and property insurance cost $93,625 more than the board-approved budget.
The News asked for invoices paid from this fund, and received records showing $1.575 million in spending, not including the salary and benefits expenses. These records, and every record the News paid to procure from the school in this investigation, will be available for review at howellcountynews.com. Hard copies may be obtained, for free, upon request at the news office.
There is no anomalous spending in this fund– rather, there are costs that show the outfitting and construction of Innovation Hall, the school’s career and technical education (CTE) program. The general ledger even shows a $500,000 grant for CTE projects, but again – the budget, as passed, did not account for the on-narrative spending that occurred in this fund.
Tax-funded budgets are a guideline for entities like a school board. They are easily amended by a vote of the board.
As previously reported by the News, that is not what happened in Willow Springs.
Audit, contracts, budget
Spence pointed out, “We are independently audited every year.”
Without an audit, overspending seemingly went unnoticed until the end of the fiscal year.
The school board in Willow Springs heard from their independent auditor, Kenny Thomas, in January this year. At that meeting, the reserve balance was reported to be 13.98 percent, below district targets of twenty percent. Thomas, and former school board members present at that meeting, admonished the board and superintendent about spending.
Thomas told the board that if they kept spending as they were, they would be “done” in two years.
Since January, the mid-point of the fiscal year, the board has been meeting in regular budget work sessions prior to most board meetings.
From January to April, employment contracts for the 2025-2026 school year were signed. Spence’s salary stayed the same -- $126,845. Retained teachers, non-certified staff, and other administrators either stayed the same or increased according to the district’s published step schedule.
In August, the board passed a $15.53 million budget with a net decrease of $898,124 in total salary and benefit projections for the year.
In his August 29 email, Spence said, “Budgeting practices have changed for FY26, and we are working with an independent consultant to make sure everything is correct.”
Revenue this year
Revenues this year are projected to increase by about $400,000, according to projections released by Spence on Aug. 11. In a column that appears on page 2, Spence assures stakeholders that the district is paying employees on time and paying its bills.
As of the last board meeting, the projected cash balance in June 2026 is $1.23 million with anticipated revenues of $15.94 million.
According to the budget summary Spence presented on Aug. 11, a full review of staff salary and benefits occurred on Aug. 22 after all staff received payment. The school board is scheduled to meet in regular session on Sept. 8 after press time.