GARY | As the Gary Community School Corp. continues to wrestle with its finances, its School Board approved a 2016 budget of nearly $93.9 million.
Of that amount, the general fund budget, which pays for school salaries and benefits, is $57.5 million.
The Gary School Board also approved a capital projects budget of $6 million and a bus replacement fund of $6 million though it's likely to see a lot less when the state certifies the budget.
It's no secret the Gary Community School Corp. is facing challenges -- financially and academically. It is receiving assistance from the Distressed Unit Appeals Board, which recommended last week the district receive a $15 million no-interest loan to help pay critical vendors from the Common School fund.
DUAB recommended the district hire a financial adviser and it chose Jack Martin, a Michigan-based financial turnaround specialist, who began working with the district a few months ago.
As a result of the biennium budget approved by legislators this year, Gary is projected to lose about $9 million over the next two years.
Declaring the district "high risk," the state Department of Education placed a representative in the school system to oversee federal spending.
Enrollment has dropped by more than 1,000 students, which will further impact the district. Last September, Gary Superintendent Cheryl Pruitt said enrollment was 7,257 students. This fall, enrollment is 5,947, said school spokeswoman Charmella Greer.
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In September, the Indiana State Board of Accounts issued an audit saying it couldn't determine if the district's spending reports and account balances were accurate.
Deputy state examiner Tammy White said this week it will follow up with the corporation on each of the audit comments and findings annually.
"The loan that the DUAB will be recommending from the state common school fund will help the corporation to operate in the short term so that they may, with their financial adviser, develop a long-term plan for financial recovery and coming into compliance. The plan has many components that are under consideration but has not yet been fully researched and developed," White said.
DUAB Chairman Micah Vincent said the financial adviser is evaluating all areas of the school corporation’s finances and working with the school board to save costs. In turn, DUAB is working closely with the financial specialist as he and his team aid the school corporation in dealing with its financial situation, he said.
Regarding the State Board of Accounts audit, Vincent said, "It speaks for itself."
The Gary Community School Corp. is $23.7 million in debt and is having trouble paying vendors and teachers. It has total debt of nearly $92 million.
That debt includes more than $7.1 million in taxes and interest due the IRS; $4.15 million owed to NIPSCO; $730,000 owed to AT&T; about $1 million to Illinois Central Bus Co.; and $440,000 owed to the Gary Sanitary District.