MOSES LAKE — The Moses Lake School District has found another issue as it works to untangle accounting and budget errors that have put the district in a financial chokehold. Board members, administrators and staff from Education Services District 171 are prioritizing getting a clear picture of the district’s finances and dealing with 2023-34 school year challenges before tackling the 2024-25 budget. 

“And so, as I have shared repeatedly, we’re learning more each and every day, and so today, we’re going to have some kind of difficult information about state apportionment and about our cash flow. The good news is, I think we have some solutions in mind,” said Acting MLSD Superintendent Carla Lewis during a Friday study session with the school board. “They’re not ideal, but we have some solutions in mind.” 

Lewis said that she’d spoken with ESD 171 staff that morning and they had informed her that the district’s financial situation meant MLSD had more challenges than anticipated. 

ESD 171 Deputy Superintendent Linda McKay said cash flow from apportionment — the money the district receives from federal and state sources based on student enrollment numbers — was lower than anticipated. That reduced cash flow, combined with errors in accounting associated with not backing out projected funding credits when actual funds were received and coding errors had led to a shortage of funds available to make payroll for May. 

Apportionment funding for May came out to about $7.4 million, McKay said. The ending cash balance for April had been just under $3.4 million. However, payroll for May comes out to about $11 million, and other accounts payable, which includes monthly operating expenses and employee insurance payments, totaled out to a bit less than $2.1 million. Those two debits from the district’s budget will leave a negative balance at the end of May of a little more than $2.2 million.

While Lewis said she acknowledged and appreciated feedback from community members about ensuring the 2024-25 school year’s budget maintained athletics and extracurriculars as much as possible, she said that issue would need to be addressed after the payroll issue was resolved and the district had a clearer picture of its finances.

Board members, administrators and ESD 171 staff discussed multiple options to address the issue and ensure payroll is met. During the discussion, the most likely solution is for MLSD to borrow from its capital fund — money usually set aside for major projects — and repay itself over time. Interest on the loan would effectively negate investment earnings the money might have otherwise garnered the district.

While no vote was made to adopt a plan to borrow from the capital fund — a vote is not allowed during a study session — a consensus was reached to hold a meeting Thursday evening at 6 p.m. to discuss and vote on a resolution to do so. 

Other priorities for the school district include identifying possible grant funding and ensuring grant moneys are optimized; identifying outstanding payments and balancing the district’s budget registers; and minimizing expenditures. 

One contractual deadline may not be met in that, because of the complexities of determining staffing and budget reductions, teachers will not receive their teaching assignments for the 2024-25 school year prior to the last day of school, McKay said. That may lead to grievances, but the situation is unavoidable given the timeline of discovering budgetary issues so late in the year. Other districts facing similar challenges had 10 months to meet such deadlines, but MLSD has only had a two-month lead time, she said. 

ESD 171 and MLSD staff are working with the Grant County Treasurer’s Office to verify account balances and ensure they do everything according to statutory requirements, including the possible loan from MLSD’s capital fund. More details will be determined Tuesday and Wednesday, McKay said, and a draft emergency resolution should be ready in time for any fund transfers to take place Thursday and ensure staff are paid. 

Once the current year’s budget issues are taken care of, the district will begin developing a plan for next year’s budget. Levy funding will be received in the first semester because the levy is approved by the calendar year rather than the school year, but that funding will be limited. 

The board and Lewis continued to express their dedication to transparency and presentations from the meeting were ordered to be posted on the district’s BoardDocs website.