MARYSVILLE, Wash. — The Marysville School District serves about 9,700 students, according to a newly published report that says the district is struggling financially. The district says a double levy failure, which resulted in the loss of $25 million in funding, is part of the reason. Now, after an independent review, the Washington state auditor is urging school leaders to take immediate action.
When it comes to the budget, the report says the situation seriously declined, to the point where there are concerns about Marysville School District's financial future.
“This is the most alarming audit of a public school’s finances in 17 years,” said State Auditor Pat McCarthy in a press release. “Local leaders have a financial and a community responsibility to right their ship. The stakes are too high for Marysville and its children.”
McCarthy says her office objectively examines every state agency, city and school district in Washington.
In Marysville, the audit shows the school district's budget has continued to decline since 2022, noting that the general fund went from having 38 days’ worth of operating expenditures to -11 through June of this year.
“School is going to start in a month, so this is an issue that needs immediate action,” said McCarthy.
The district has been dealing with double levy failures, declining enrollment and the exit of experienced staff.
“While they may have had some issues, nothing in this audit shows that they have, at least at this point, done what they need to do to start to turn the situation around,” McCarthy said.
The report includes Marysville School District’s response, which states, "The District has made significant budget reductions and continues working closely with OSPI.”
The Office of the Superintendent of Public Instruction, or OSPI, is the agency the school district is in financial binding conditions with due to an inability to balance the budget.
“We are counting on you. These people behind me, their grandkids, their kids are counting on you. If we don't get it in the right direction, we will be in this hole forever,” a community member said during the Aug. 5 school board meeting.
The report recommends the district work with its partners to balance its budget, so that it can continue to provide a quality education to students in the community.
Wednesday evening, Marysville School District released the following statement:
"On August 5, 2024, during a work study session of the Board of Directors, representatives from the Washington State Auditors office held an exit conference with the Superintendent and the school board reporting on the 2022 -2023 school year audit.
The audit consisted of a review of the district’s financial statements and federal awards for the audit period of September 1, 2022 through August 31, 2023. The auditors noted that seven major federal programs were included in the audit, which they stated was an unusual number; however, given federal dollars that districts received through COVID and other funding sources during the audit period, it was a federal requirement to look at additional areas.
The auditors shared, ‘The report describes the overall results and conclusion for the areas examined. In those selected areas, District operations complied, in all material respects, with applicable state laws, regulations, and its own policies, and provided adequate controls over the safeguarding of public resources.’
Overall, the district received a clean opinion on the district’s financial statements and federal awards.
Although the audit was for the 2022 - 2023 school year, the Washington State Auditor shared a press release that included statements about the district’s current financial state. However, the release omitted critical information about the district's current financial state. Of note, although the audit period was for the 2022 - 2023 school year, a significant focus was placed on the district’s current financial state, which seems unusual.
In the press release, there is no mention of the district's double levy failure, which resulted in a loss of $25M in funding for schools and the district. There is also no mention of the nearly twenty school districts across the state that are close to entering into binding conditions. Other districts are experiencing financial difficulty with passed levies. The loss of $25M in funding is significant and cannot be understated when trying to achieve a balanced budget. It would be difficult for any district to overcome this type of loss. The omission of losing $25M in revenue is glaring and odd, particularly in a report about finances and in a discussion of a school district's fund balance. For example, It seems obvious that the absence of $25M would affect a school district's fund balance. Again, such glaring omissions seem odd given the district’s circumstances, and we struggle to understand why there would be such omissions.
It is disappointing to read a press release and statements in the audit report that place the district in a position that leads the community to question its viability. The district has been working hard to address and correct past practices and solidify systems and structures to produce a balanced budget and eventually exit binding conditions. This type of negative public communication harms the district and undermines its ability to restore trust in the community, ultimately negatively impacting students, families, and staff."