MLSD announces town halls to address financial issues

MOSES LAKE — The Moses Lake School District will be hosting a series of community events at various campuses to discuss the district’s current financial crisis, according to a letter from MLSD Interim Superintendent Carol Lewis. 

In the letter, Lewis said there were multiple accounting errors which contributed to the overall situation. The issue was noticed in early May of this year when North Central Education Service District 171 noticed that the district’s financial position was not accurately represented in information provided to the community and school board. While no funds were misappropriated or stolen, inaccurate accounting practices led to the budget shortfall. 

MLSD is funded based on student enrollment with each student receiving an apportionment of educational funding from the state based on the size of its student body. While there are other factors, the bulk of the district’s funding comes from that apportionment process, the letter said. The district’s accounting staff had overcounted enrollment by about 200 students. The error was based on a projection that somehow double counted alternative learning students in the district.  

“The staff members who were closest to the accounting errors, and those who were responsible for supervision and oversight of accounting when the errors occurred, are no longer employed by the Moses Lake School District. Our commitment is, and will remain, to LEARN from mistakes and put practices into place that safeguard from future accounting errors,” Lewis’s letter said.  

ESD 171 had noticed the anomalous reporting in January and notified MLSD’s finance office of the concern. However, Lewis said, the finance office responded saying ESD 171’s numbers were incorrect. Without binding conditions in place for the ESD to step in, no further action was taken initially.  

However, the ESD’s information was correct, and Lewis said the district’s apportionment for the remainder of the 2023-24 school year was reduced by about $2.1 million. In addition, the ESD has identified several other small accrual accounting errors that happened beginning in January 2023 and another large error of more than $9.9 million because a large amount of money was recorded twice in the district’s accounting.  

Lewis’s letter did not indicate whether anyone outside of MLSD’s finance office had been made aware of the ESD’s concerns, nor did it address concerns expressed by County Treasurer Darryll Pheasant that the county’s records and the district’s were not in alignment. 

Accrual accounting is a method of funding that schools and some other special purpose districts use nationwide. Lewis compared it to someone saying they will give another person $1,000 in December. The recipient spends the money to buy something immediately, and the money is gone before it really arrives. In MLSD’s situation, the money was counted when it was considered owed and counted again when it actually came in, leading to the current situation.  

Lewis’s letter indicates that the district has taken steps to ensure similar issues don’t occur in the future. In addition to hiring experienced finance officer Mitch Thompson to operate the district’s Finance Department, the district has put quality checks in place. Those include:  

• Two Moses Lake School Board members review all accounts payable transactions twice monthly. 
• Accounts payable transactions are posted to the district’s website for residents to review at www.mlsd161.org/finance. 
• Checks and balances have been created between payroll and human resources.  
• School district accounts are now balanced with the Grant County Treasurer’s Office each month.  
• Budget status reports are provided to the public and school board monthly.  
• Purchases of more than $25,000 must be approved by the school board. 
• Supervisors must approve all other expenditures, and staff will be held liable for purchases made without approval.  
• Automatic alerts have been set up for digital financial records to ensure accrual accounting is used correctly and double counting is immediately corrected before it causes issues.

To read Lewis’s letter in full, visit the MLSD website at www.mlsd161.org.  

Editor’s Note: While Lewis’s letter’s points are clear, some questions remain. The Columbia Basin Herald will be contacting Lewis, current and former school board members, and others to obtain additional information. 

Community Meetings:  

All meetings listed below will provide identical content and will be led by Moses Lake School District Interim Superintendent Carol Lewis. Spanish interpreters will be available at each meeting. Meetings will be held from 6-7 p.m.  

Oct. 1 –Sage Point Elementary – 4,000 W. Peninsula Dr.
Oct. 7 - Endeavor Middle School – 6527 Patton Blvd.
Oct. 14 – Vanguard Academy – 740 E. Yonezawa Blvd.
Oct. 22 – Frontier Middle School – 517 W. Third Ave.