Local school districts forfeit stimulus funds to pay for special education
November 15, 2009
The regional cooperative agency that provides state-mandated special educational services to the six school districts of northwest Colorado is in financial trouble.
BOCES is in arrears some $777,000 in federal reimbursement payments to the schools in the Northwest district for the 2008-09 and 2009-10 school years, leaving West Grand with a $139,000 budget shortfall and East Grand with a $220,000 shortfall, according to school district officials.
In mid-September, BOCES administrators came to its board of directors, made up of representatives from each of the six member districts, with the news that it had overspent its 2008-09 budget by $316,000. Staff also alerted the board that it would need to increase its 2009-10 assessment by more than $472,000 to balance its budget.
BOCES claims that the reason for the shortfall was that they under-assessed the services provided to the districts.
BOCES said it could pay about two-thirds of what it owes the schools and initially asked the member districts to pay for the remainder out-of-pocket.
The districts, however, had already set their budgets for the year based on last year’s assessments and could not make up for the deficit.
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After much consideration, on Nov. 12 the BOCES board approved the use of $870,000 in stimulus money from the American Recovery and Reinvestment Act (ARRA) to settle the bill – funding that would have otherwise have gone to the school districts.
Since the Northwest BOCES was not eligible to use ARRA funds to backfill current expenses, it gained a waiver from the Colorado Department of Education.
“The bad side is that we were going to get that money anyway and we had plans to use it,” said West Grand School District superintendent Kevin Chalfant. “We are out that money now.”
For the East Grand School District, that money could have been used to improve classrooms and augment specialized equipment for special-needs students, according to Superintendent Nancy Karas.
“So that is the loss,” she said. “But the other side of that is, it saved teachers. We were at risk of losing much more if we would have had to pay it out of the general fund.”
The East Grand district’s sacrifice in ARRA funding amounts to $86,000.
“The frustrating part is, those are our expenses, and we are liable for those,” Karas said. “But they (BOCES) have a responsibility to be accurate in their budgeting so they can assess us the right amount. To come back a year later – for two years of an assessment that wasn’t budgeted for – was potentially crippling to some of the districts. And that’s why we had to make the choice and come to an agreement to use our stimulus funds.”
BOCES will further cut costs by reducing health insurance for its staff, scaling back on mileage reimbursements and cutting out budget contingencies.
The six BOCES district superintendents meet monthly as part of the consortium. Budget problems have been determined to be a result of mismanagement rather than any embezzlement or financial scandal, according to both East and West Grand superintendents.
“My understanding is that at this point, we have no reason to believe there was any fraud,” Karas said.
Mistakes appear to have stemmed from mismanagement of multiple levels of accounts and administering federal funds after services and bills had already been paid, resulting in faulty budget processes.
“I think it was through that shell game they lost sight of what the actual balances were,” Karas said.
As a result of an investigation into BOCES’ budget problems, the Colorado Department of Education (CDE) has revoked NWBOCES’ ability to serve as the fiscal agent for federal title funds for the remainder of this year.
According to CDE deputy commissioner Robert K. Hammond, this decision was based on: BOCES’ inability to assure NCLB funds are being properly accounted for, managed and used; inappropriate use of NCLB funds to support BOCES’ programs; failure to reimburse member districts for their expenditures; violation of federal law with regards to federally funded programs; and, accrual of interest on federal funds.
The BOCES board has planned a special meeting with an executive session on Nov. 23 in Steamboat Springs to potentially discuss personnel matters.