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District officials say most encumbered capital funds tied to New Hanover High; closeout expected before school starts
Summary
School staff told a joint committee that about $9.56 million in capital funds are encumbered, roughly 73% of which is for New Hanover High School work that is expected to be complete and closed out by early September; officials and commissioners discussed why money appears to be ‘sitting’ in accounts and the typical lag for invoice closeout.
Rob Morgan, assistant superintendent for operations and planning, told the New Hanover County Schools facilities committee on May 20 that the district currently has $9,563,000 in encumbered capital funds and “roughly 73% of that is encumbered to New Hanover High School.”
The figure reflects purchase orders and contracts in place, Morgan said, and “the project's going on there that we expect to be completed. As of right now, they are on schedule, mister Sutton. And, we're hoping to see them done, closed out, hopefully, by September 1.”
Committee members pressed staff to clarify the difference between a project’s completion date and the accounting closeout. One committee member asked whether the September date meant all bills would be paid before school starts; Morgan answered that the date he cited referred to closeout and that some invoices might still be unpaid even if the construction work is complete.
Ashley (staff) explained the typical lag: inspections and paperwork take time, and “if everything looks good, a month or 2 is the estimate I would use” for closeout and payment after substantial completion. Another staff member reiterated that completion listed on the project sheet is “the completion date of the project. That is not the closeout date of when we expect all the invoices to be paid.”
County commissioners participating in the meeting said the gap between money shown in district accounts and actual spending has created public confusion. Commissioner Apple referenced a separate figure—about $13 million in the account—and asked whether $9.5 million of that is spoken for; Morgan confirmed the larger number includes other encumbrances and projects beyond New Hanover High.
Committee members asked for follow-up breakdowns, including a view of encumbrances excluding the New Hanover High work so commissioners and the public can see how much of the capital balance is committed to other projects. Morgan said he could provide that figure in print.
Discussion also covered how work schedules and fiscal calendars interact: because much construction must occur during summer, projects commonly span two fiscal years, and invoices may be billed when work is done but paid afterward. One participant summarized the effect: projects ‘‘don’t marry up with the fiscal year very well at all, because most of the work has to occur over the summer.’’
The committee did not take formal action on reallocating funds or changing contract timelines at the meeting; staff were asked to produce clearer, itemized reports that separate currently encumbered funds tied to New Hanover High from other encumbrances and to show estimated completion and projected invoice-closeout windows for the public and commissioners.
The committee also agreed to arrange site visits to New Hanover High so members can see construction progress firsthand.
