Elma School District audit could lead to $1.2M payback

An Accountability Audit Report conducted by the Office of the Washington State Auditor was the main talking point of the Elma School District Board meeting on June 22, as discussions surrounded academic guidelines and the potential for a seven-figure payback to the state of Washington.

The audit, which was made public record on May 26, concluded in its findings that: “The District’s internal controls were inadequate for ensuring accurate reporting for basic enrollment.”

The finding stems from background information in the audit report that the Elma High School was operating on a hybrid model of instruction during the 2020-21 school year due to the COVID-19 pandemic. Therefore, OSPI (Office of Superintendent of Public Instruction) issued temporary guidance that allowed school districts to be more flexible in their recording of remote learning for student schedules. According to the report, it says the Elma School District didn’t detail how the high school expected students to participate in remote learning throughout the week.

Lisa Arnold, who serves as Business Manager for the Elma School District, presented the audit findings to the school board members and Superintendent Christopher Nesmith. She said the audit findings revolving around student scheduling, which were conducted in February 2021 at the Elma High School, showed an over-reporting of weekly enrollment minutes totaling 120.8 FTE (Full-Time Equivalency) and discussed what a payback might entail.

“Well right now, we’re being told that they (State Auditor) only looked at February and won’t look at any other month. That calculates to about $102,000 for the month of February that would be payback,” Arnold explained. “Now if they choose, OSPI can go back and say, ‘Well we’re going to look at every month.’ That could run $1.2 million in payback.”

Arnold clarified that OSPI holds the authority to determine if the payback will be enforced and they will eventually contact the district to determine what actions will be taken. Multiple attempts were made by The Daily World to contact OSPI to find out how they planned to address the audit findings, but could not be established by the time of press.

According to the audit report, more weekly minutes in the reporting system than what the high school’s student schedule listed resulted in Elma School District over-reporting FTE for school funding. In the 2020-21 school year, the district received approximately $20.5 million in state funding.

While the school board discussed their confusion and frustration about the findings, the board agreed about trying to improve for the future and make sure reporting is following every standard that OSPI wants.

“There were guidelines given and they weren’t followed. So, moving forward, if there are guidelines, we need to make sure they’re being followed so that way we don’t have an error like this again and costs us $102,000,” said Stephanie Smith, School Board member for District 4.

Board members and Superintendent Nesmith say they hope OSPI will look at the fact that they were giving a good faith effort to adjust properly to COVID-19 policies about having kids in school when looking over the findings.