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PGCPS fund balance fell $157 million in FY25 to $216.7 million; district below GFOA two-month reserve standard

Prince George's County Board of Education — Operations, Budget and Fiscal Affairs Committee · November 14, 2025
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Summary

CFO Lisa Howe and budget director Javonne Smith told the committee that FY25 ended with a $157 million decline in fund balance (from about $373 million to $216.7 million), leaving the district with less than one month of operating reserves versus the GFOA recommendation of two months.

Prince George’s County Public Schools’ finance leaders on Nov. 12 told the Operations, Budget and Fiscal Affairs Committee that the district’s fund balance declined by roughly $157 million from the start of FY25 to the end of FY25.

Director of Budget and Management Services Javonne Smith reported the district realized approximately 98.6% of budgeted revenue and spent about 97.8% of budgeted expenditures in FY25. Smith said the fund balance dropped from about $373 million at the start of the year to roughly $216.7 million at year-end — a roughly 42% spend-down.

“We started the year with about $373,000,000 or so, and then we ended the year at about $216,700,000, which is about a 42% spend down,” Smith said. The presentation identified $95 million of fund balance assigned for the FY26 budget and a reserve of about $80 million designated for potential future obligations.

Smith and CFO Lisa Howe explained why the fund balance matters: the Government Finance Officers Association (GFOA) recommends keeping at least two months of operating expenses in reserves; the district’s current level is below that threshold and therefore prompts mitigation steps.

Howe and Smith outlined mitigation strategies including a hiring freeze for nonessential central-office positions, cutting discretionary nonpersonnel spending, proactive management of overtime and substitutes, maximizing grant funding, evaluating long-term vacancies for elimination and consolidating contracted services.

Board members asked for additional context on the fund-balance significance and guidance for replenishment; staff emphasized the need for a replenishment plan to avoid long-term structural gaps and said they will continue monitoring Medicaid reimbursements, SR 3 reimbursements and other federal/state funding uncertainty.

No votes were taken; the session served as an early preview of FY27 budget assumptions and potential reductions.