$2.5M snafu puts further stress on Dallastown school district
A budgeting error means Dallastown Area School District will now have $2.5 million less to work with next year.
A one-time debt service transfer in May was missed in budget projections for the district’s fund balance at the end of 2019-20 — meaning the district will now have to find an additional $2.5 million in next year’s budget.
“Had the board known about this, we probably would have made some other decisions on this year’s budget,” said school board member John Hartman on Thursday. “Our work is cut out for us for this year.”
The debt service transfer was the result of refinancing, and when the business office discovered it was missing from projections, officials immediately notified the superintendent, who then shared it with the board and finance committee in August.
“It was not an error on the books; it was entirely an error in projection,” said board President Ronald Blevins on Thursday.
Requests for comment on how the oversight occurred were not returned, but according to minutes from the school board finance committee's Aug. 10 meeting, an audit confirmed there was no misconduct.
The mistake will put significant strain on the district, however, especially in the wake of continuing COVID-19 costs that already stretched dollars this year.
“This news comes on the back of preparing a very difficult 2020-21 Budget in which we scaled back our personnel costs by approximately $1M and other programs/offerings by another $750,000,” meeting minutes state.
And that was without the impacts of COVID-19.
The board balanced its 2020-21 budget of $111.9 million using $2.9 million from the district's fund balance, so the error only compounds the use of “these limited and shrinking dollars” moving forward.
The fund balance at the end of 2020 was expected to be $11.5 million, and now it's slated to fall to $9.2 million. Adding in additional COVID-19 costs, it could fall as low as $4 million to $5 million.
But there have been other cost drivers as well, such as health care — which has exceeded its budgeted amount for the last three years, minutes note.
Discussion noted in the Aug. 10 minutes shows board members would have likely gone for a tax increase or more aggressive cuts in this year’s budget had they known about the error. They might have depleted some contingencies by paying future expenses in current-year budgets, minutes state.
Dallastown has had no tax increase in its last three approved budgets.
"Our challenge as an administration and as a school board is to figure out steps that we can take to modify our structural deficit so that we can have a fund balance that is comfortable for a district of our size," Blevins said.
With more than 6,000 students enrolled, Dallastown is one of the county's largest districts.
"It was a serious offense," Hartman said. "We are taking it seriously."