$11 million accounting error contributing to major cuts in one school district

By Melissa Luck

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    MOSES LAKE, Washington (KXLY) — An error in the Moses Lake School District’s accounting practices could lead to more than 100 positions being eliminated.

The Moses Lake School District has acknowledged in recent days that the district is facing a $20 million budget shortfall.

The district has pointed to a levy failure and a reduction in state funding, but acknowledged during a school board work session Saturday that the district is also making up for $11 million in accounting errors.

In a budget planning document, the district points to $11 million counted twice, giving the district the illusion that it had more money than it did.

At the school board meeting, a presenter said it happened when balance sheets were not cleaned up from year to year.

Essentially, the district added money to one fiscal year even if it didn’t yet have cash in hand. When the cash did come in, the district never went back and cleaned up the balance sheet, so the money was counted twice.

The error was not discovered until May 3rd.

Money isn’t missing, but it was – as an auditor told the board – booked twice.

The district also found out at that time that it budgeted for more students than it actually had, meaning it didn’t get as much from the state as it expected.

An auditor also told the district it’s overstaffed.

For example, the district is funded for 415 teachers, but actually employs 625.

The district is also funded for 100 classified staff and employs more than 400.

The auditor also told them each teacher in the district is earning about $20,000 more than they’re funded for, leading to an $8 million gap.

In part because the levy failed, the district won’t be able to make up that gap.

At a special board meeting Saturday, school board members said they were already planning for an $8 million budget shortfall, but when the accounting errors were discovered, it led to a more dire situation.

“In my outreach in the community, the biggest complaint I heard of why our levies failed is a lack of transparency and accountability,” said school board member Paul Hill. Hill encouraged transparency through the budget process to build back that community trust and support.

Board members focused largely on voter turnout and gathering levy support to bolster the district’s financial situation.

Voters in Moses Lake failed to pass two recent educational programs and operations levies.

The school board passed a budget resolution last week to reduce staff positions, cut extra-curricular activities, cut school resource offices, scale back career and college readiness programs, and reduce travel and supplies.

The district also acknowledged in the meeting that it has much less in reserves than originally thought because of that accounting error.

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