In making her recommendation, Dr. Ingram explained that the budget transfer is required to adjust the budget due to the anticipated $1.3 million decrease in revenues. The transfer was to be moved to the contingency fund account.
Board member Annie McDaniel said, “A contingency is like a savings account. If we are anticipating the money is not going to come in, and we are cutting the budget by $1.3M, should we not be decreasing revenues instead of moving money to the contingency fund?”
Ingram answered, “This is an anticipated amount. we have anticipated what the revenue is going to be; we might not have a shortfall. We don’t know what we’re going to receive in revenue.”
She added, by moving the $1.3 million to the contingency fund, it does decrease the expenditures in the budget.
McDaniel asked, “did we not send a resolution to Fairfield County Council that reflects a $1.3M decrease?”
Dr. Ingram responded, “the budget has been set up so that we have decreased, in certain categories, the budget by $1.3M. That money will be placed into an account that will not be expended.”
“We can’t build a budget like that; the state of South Carolina requires a balanced budget, based on what we’re supposed to bring in, and if we sent a resolution on that amount of money, then that’s what the operating budget is supposed to reflect, not $1.3M in a contingency.
“I’m not even sure (a contingency fund) is legal in the state of South Carolina,” McDaniel said.
Dr. Ingram responded that the plan for a budget transfer into the contingency fund was shared with the district attorneys.
McDaniel then asked to wait on the budget transfers until the board was sure that they could transfer money into the contingency fund.
“I think we ought to recognize that we’re supposed to be on the budget that we sent to county council.”
Dr. Ingram commented that the district was following the policy that has been set for budget transfers.
Board chairman Harold Heath said, “if we’re following our policy, then it seems to me that the question has already been answered.”
Board member Catherine Kennedy said that her concern was not that whether the policy on budget transfers was being followed, but “if there was a legal person to tell us whether or not what we’re doing with the contingency account was legal.”
Dr. Ingram pointed out that the board approved a budget at the beginning of the year with a contingency amount.
McDaniel: “The resolution that we sent to county council stated a cut of $1.3M...the transfers are supposed to show where we actually took that money out of the budget...”
Board member Becky McSwain proposed an amendment that the budget transfers be approved, with the provision that Dr. Ingram look into the issue of the contingency fund. This amendment passed 5-2 with board members Kennedy and McDaniel voting against.
The amended motion to approve the budget transfers also passed 5-2 with McDaniel and Kennedy voting against.
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