Reply to Emergency DCPCSB meeting re Washington Math Science Technology high school

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[quote=Anonymous][quote=Anonymous]It's financial. The school is deeply awash in red ink. [/quote]

http://www.livebinders.com/play/play?id=2345731

Rationale and Background
After receiving a series of troubling financial updates from the school, DC PCSB
hired accountants from a forensic accounting firm to independently review the
school’s finances. The firm has been working cooperatively with the school since
February 26, reviewing the school’s financial condition in detail.

The firm has produced a series of weekly cash flow forecasts (Attachment A)
through the end of the 2017-18 school year. These forecasts find that:

• The school is unlikely to have sufficient cash to meet its March 23 payroll,
unless it delays paying many bills due now, such as utilities;
• Even with delaying payables, the school will not have sufficient cash to meet
its April 6 payroll;
• The school is forecast to require $833,991 of additional cash between now
and the end of its fiscal year on June 30, 2018 to cover all expenses,
including payroll, operating costs, mortgage payments, and required debt
repayment. This number grows to over $1,164,853 when adding the payroll
due the current teaching staff in July and August for their work over the
2017-18 school year.
• The school has a $300,000 line of credit which is presently fully drawn down.
• It currently has no other source of new cash or financing.
• The school’s largest asset is its building. The school has a Letter of Intent
from a buyer, indicating a possible, but not certain sale. However, the net
proceeds from the sale, at the current proposed purchase price and after
closing costs and repayment of the mortgage, is insufficient to cover the
$833,991 projected deficit.

The source of the school’s financial distress is a steadily declining enrollment
without commensurate expense reductions. The school enrolled 351 students in
2012-13 and enrolled 228 at this year’s audit
[/quote]

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