FREDERICKTOWN – Bethlehem-Center School District is struggling with a $1.5 million deficit at a time when it is replacing neglected roofs on buildings.
The deficit was discovered in a reconciliation audit of the 2017-18 spending performed by Cypher & Cypher Certified Public Accountants in Canonsburg, district records show.
“It’s all come crashing down,” district Superintendent Chris Sefcheck said Thursday. “We’re going to struggle.”
Sefcheck said it didn’t appear that any money had been stolen from the district in a budget year that predated his hiring.
He said he was told when he was hired that the district had a surplus of $1.1 million.
“What it looks like is the accounts weren’t reconciled,” Sefcheck said. “The balances were inaccurate.”
The district’s new business manager, Joseph Gudac, said the school board is anticipating raising real estate taxes to the state limit of about 3 percent.
Gudac said the tax increase would generate $140,000, depending on the collection rate.
It was estimated that the tax increase will cost property owners about $9 for every $25,000 of assessed value.
The district cannot lay off teachers because of union contract terms, Sefcheck said.
“We are going to have to increase revenues and decrease spending,” he said.
The district will save $100,000 by using a grant to open a coffee shop at the high school run by life-skill students. The savings come in the form of eliminating transportation costs to take those students to places to learn life skills, Sefcheck said.
He said the problems are the result of decades of issues, some of which involved the turnover rate in the superintendent’s office in a district with a declining population.
The deficit was discovered months after the school board authorized the spending of nearly $10 million to replace roofs on school buildings that were saturated during rain in September from Tropical Storm Gordon.
The Cypher & Cypher audit found that the 2017-18 budget that was sent to the state Education Department was different than the one entered into the district’s accounting software. The difference resulted in a $250,319 variance.
A number of statement of financial interests forms involving Beth-Center elected officials could not be located and can result in state Ethics Commission enforcement action, the audit showed.
The operating and payroll accounts were overdrawn on many days during May and June 2018, and the problems were solved using transfers that were not approved by the board, the findings show.
Expenditures for health benefits costing $552,867 between April and June 2018 were not recorded, and all of the district’s 19 accounts were not reconciled and verified between January and June of that year.
The school board is expected to approve a new budget and deal with the deficit at 6:30 p.m. June 24.