Budget & Finance

How School Districts Can Avoid Costly Mistakes That Make Auditors Grumble

By Mark Lieberman — October 19, 2023 3 min read
Magnifying glass on financial chart
  • Save to favorites
  • Print

Howie Barber has served as assistant superintendent of finance and operations for the Old Rochester regional school district in Massachusetts since 2020. Years before he arrived, the district’s finance team made a mistake that led to some misspending of a small amount of state grant dollars.

Barber and his colleagues haven’t repeated the error since. But that mistake haunts him when he’s applying for new grants, Barber said here during a session Thursday at the annual conference of the Association of School Business Officers (ASBO) International.

“Every year, it’s a phone call or an email” from grant providers reminding his district not to make the same mistake again, Barber said.

The story illustrates the long tail district leaders face as auditors swoop in to examine how they spent billions in federal COVID relief aid that’s poured into K-12 schools since the COVID-19 pandemic began.

Any district that spends more than $750,000 in federal money each year will be subject to an audit. Some districts, after receiving the unprecedented sums of federal spending, will likely be encountering an audit of federal funds for the first time.

Auditors thus far haven’t turned up widespread mismanagement of COVID relief dollars in schools. But spending federal dollars prudently requires navigating complex rules, tight schedules, and dense bureaucracies.

Barber’s session highlighted some of the most common mistakes around federal spending and offered tips for avoiding the classic no-nos. Here are a few key takeaways.

See Also

Eric Russell, CFO for the city of Columbus, Ohio, pictured on July 15, 2022.
Eric Russell has audited and consulted for more than 100 school districts.
Dustin Chambers for Education Week

Reach out early and often to your colleagues and constituents

School finance officers sometimes operate in their own silos, with little on-the-ground experience in classrooms and school building leadership. But it’s important for school officials to see with their own eyes how money is being spent, Barber said.

He recommends that finance officers set monthly meetings with school building administrators or grant managers to keep track of how spending on a particular grant is going and what challenges have arisen. Conversations with procurement officers can also help illuminate whether grant funds are going toward the items the grant is meant to cover.

Barber’s regional school district administers grants that several smaller districts also receive, so he keeps in close touch with fellow administrators there as well.

Consider the long-term ramifications of misspending

If a district misappropriates $100,000 out of a $1 million grant, it’ll likely have to pay back that amount to the agency that awarded the grant. But district staff also have to find new funds to cover the cost of whatever they inappropriately spent the money on in the first place.

“You lose twice the amount of money without going through these planning phases,” Barber said. “Any type of small mistake can be extremely costly.”

A district might have followed every grant rule to the letter, but if administrators aren’t documenting those steps as they go, auditors may take issue with even the most scrupulous spending decisions.

See Also

Photo of cash in mousetrap.
iStock / Getty Images Plus
Budget & Finance Auditors Are on the Hunt for ESSER Fraud. 5 Things to Know
Mark Lieberman, July 20, 2023
6 min read

Consistent leadership and institutional knowledge play a big role here, according to Barber. Eight people occupied his role in the 10 years prior to his arrival in the district. “There wasn’t a way of really managing everything, so the documentation wasn’t there,” he said.

Keep elected officials abreast of the latest grant-related developments

Many school boards require administrators to request approval when new grant opportunities come in. But some chief financial officers don’t keep board members updated on how grant spending is going after the money has been awarded.

Later on, if there’s an issue, explaining it will be embarrassing, and there could be long-term ramifications.

“It’s more than an issue of loss of funding,” Barber said. “It’s a loss of respect from your school committee.”

If you move to a new state, don’t assume the rules are the same

Every state has a unique set of policies around financial documentation and procedures for procuring new materials and services, Barber said.

For instance, Massachusetts doesn’t require schools to go through a formal procurement process to secure new services or instructional tools to support students in special education classrooms. But other states do require a formal procurement process for those expenses.

State and federal regulations sometimes differ as well. And all of these policies can change with little warning.

Events

This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
Artificial Intelligence Webinar
AI and Educational Leadership: Driving Innovation and Equity
Discover how to leverage AI to transform teaching, leadership, and administration. Network with experts and learn practical strategies.
This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
School Climate & Safety Webinar
Investing in Success: Leading a Culture of Safety and Support
Content provided by Boys Town
Assessment K-12 Essentials Forum Making Competency-Based Learning a Reality
Join this free virtual event to hear from educators and experts working to implement competency-based education.

EdWeek Top School Jobs

Teacher Jobs
Search over ten thousand teaching jobs nationwide — elementary, middle, high school and more.
View Jobs
Principal Jobs
Find hundreds of jobs for principals, assistant principals, and other school leadership roles.
View Jobs
Administrator Jobs
Over a thousand district-level jobs: superintendents, directors, more.
View Jobs
Support Staff Jobs
Search thousands of jobs, from paraprofessionals to counselors and more.
View Jobs

Read Next

Budget & Finance ‘Money Matters. Now What?’: How Districts Get More Funding for Poor Students
Targeting more funding to students who are most in need has a measurable effect on their academic performance, according to new research.
7 min read
Image of a bullseye, darts, and money.
Laura Baker/Education Week with DigitalVision Vectors
Budget & Finance The Future of Property Taxes Is on Ballots This Fall. Why It Matters for Schools
Several states are considering reforms that would lower property taxes—or ask voters to approve eliminating them altogether.
4 min read
Houses made out of 100 dollar bills and lined up in a row.
iStock/Getty
Budget & Finance Racing to Spend Aid for Homeless Students, Schools Get Creative
Schools received a surge of homeless-student during the pandemic. Districts have to choose carefully in spending what's left of their cut.
4 min read
illustration of a pair of glasses with a dollar sign in one lense and a clock in the other lense.
iStock/Getty
Budget & Finance Why Some Districts Rejected Cash to Buy Electric Buses—And Others Want More
A handful of federal programs have been key to accelerating the adoption of electric school buses.
5 min read
Yellow electric school bus plugged in at a charging station.
Thomas W Farlow/iStock/Getty