Several issues have been eagerly drawn into the spotlight as candidates strive for credibility and compassion. The most obvious and most anticipated issue has been the West Valley stadium issue. However, the issue of financial responsibility has run a close second. This issue has been spurred on by repeated allegations that the district is running under a $5 million deficit, in addition to a $1.2 million accounts receivable financial oversight.

"We do not have a $5 million deficit," said Chancellor Stan Arterberry.

Steve Kinsella, the vice chancellor for West Valley College and currently the interim chancellor at Mission College, is a certified investment advisor and certified public accountant and thus has overseen the financial situation of the district for the past two years. He explains that the $5 million deficit rumor stemmed from the projected budget of last January that showed that if the district took in the same amount of money as it had the previous year, and spent what was needed to maintain services, the district would create a $4.8 million gap between its expenditures and its revenue.

"This was a projection," Kinsella assures. "Seeing that proposed deficit, we reduced our expenditure plan." Cuts were made across the board, including operational changes and the decision to not fill support positions. "By the time the final budget was approved in June of 2002, the projected deficit was down to only $700,000," Kinsella said.

The $700,000 deficit was then accepted by the board, which "felt that amount would be no issue for the district," Arterberry said.

The deficit was accepted due to the nature of the yearly employee cycle and the need to increase medical benefits for district staff. "The anticipated deficit of $700,000 is a doable amount to make up during the year," said West Valley President Marchelle Fox. "We were pretty sure that the budget could be brought into alignment, and that is happening. To make it sound like the district is on the verge of bankruptcy or there is a big problem is just smoke and mirrors."

That deficit figure was based on all current college positions being filled 100 percent of the time, which does not hold true throughout the year due to retirement and employees terminating their employment. "There is a fair amount of turnover in positions throughout the course of a year," Kinsella said. "It is a natural cycle."

Arterberry has said that since the budget adoption in June, the district has reduced the deficit to roughly $400,000, and that number is expected to continually lower throughout the year.

Jeff Schwartz, a current board member, has been outspoken about his discontent with the district's financial status. "We had a $5 million shortfall because year after year, the district has budgeted expenses and then ignored the budget and spent money in completely different ways, which has now caught up with us," he said. "We have done fairly heroic work in straightening out the situation over the past two years, but we are not all the way there."

Schwartz says, "The shortfall is not a state budget crisis—this is our crisis." To alleviate the projected deficit, Schwartz said the district "changed the level of service, cut back on classes and supplies, and took money from the reserves."

However, Arterberry has said the district did not use reserves and "does not plan on it" to cover the remaining deficit.

Arterberry and Kinsella have both asserted that the district has $6.5 million in its reserve fund, which is above the state-mandated amount of 5 percent, which would translate into $4 million for the WVMCCD.

Board candidate Bret England is concerned about the reserve status, however. "They don't have adequate reserves and know that is the case," he said. "The district has a history of overspending its budget, with little reconciliation between actual spending and the actual budget put in place at the beginning of the year. I am not taking shots at the financial team—they have cleaned up a lot of the past mistakes. But the district needs more financial management at the board level."

Robert Owens, president of the current board, accepts that there have been some inaccuracies in the recording of budget items in the past but believes "the district is making active efforts to correct inefficiencies." He said. "I have been on the board two years, and I have not seen the numbers the candidates are talking about. They are going to have to stand by the numbers they present."

"If the district was actually in as much financial trouble as is being said, it would be put on the state watch list," Fox said. The watchlist is a record of college budgets maintained by the Community College League of California (CCLC), which is a state-run agency overseeing all 72 community college districts in California.

Colleges are put on the watchlist once they have dipped below a 5 percent reserve amount. Fred Harris, a representative of the CCLC's chancellor's office, said the WVMCCD is not on the fiscal watchlist. "The district reports to us quarterly, and it has not demonstrated the need to be on the watchlist in any of the documents we have," he said.

The $1.2 million accounts receivable has been talked about in conjunction with the alleged $5 million deficit, but it is a separate item.

Accounts receivable is a method for tracking money that is spent by the colleges without prior allotment. When the district spends money on its own, it then creates an account receivable. The expenditure information is sent to the state, and then the state pays back the district. This is where the problems previously arose.

According to Kinsella, the money is received in a check that has little to no description of what item it is reimbursing. "It is very difficult to find out what the state is specifically paying you back for," he said. "The account numbers sit on the page unless someone has the time and knowledge to go back through and know what numbers match to what funds."

Ideally, the money is matched up and sent into the appropriate fund, followed by the closing of the account receivable and the check being cashed.

The $1.2 million oversight (which is actually a total of two large accounts receivable of $700,000 and $500,00) occurred over a period of high turnover in the accounting department several years ago. According to Kinsella, the accounts receivable were not closed when the money came in and were therefore accounted for as revenue and sent to the restricted fund balance (which is used for instructional equipment and maintenance work). However, Kinsella states that this caused no "impact on the budget or financial condition because the money only affected the restricted funds, which cannot be spent without authorization from the state or board."

"It is very important to recognize that this is not a sudden problem," Schwartz said. "There has been a huge effort to straighten out the situation of financial mismanagement, but it is the kind of thing with nasty surprises ... like having two huge counts of accounts receivable with no tracking and ending up with a balance that is really $1.2 million less than where you thought you were."

The district has said efforts have been made in the past two years to reconcile the bookkeeping errors and to account for all incoming funds. "We are still cleaning everything up," Kinsella said. "We are tracking and validating money, asking what that money is, how long it has been there and who it is to be collected from."

However, Kinsella is adamant that these errors were on the page only and did not affect the actual spending status of the district. "These are bookkeeping errors of money that was not recorded correctly," he said. "There is nothing actually missing."