As Federal Hocking Local School District faces an imminent fiscal emergency, a state audit of its 2006 finances released yesterday confirmed its sizable debt and found several bookkeeping errors.
The state auditor's office forecasted a general fund deficit of $752,750 for 2007 and about $1.8 million for 2008. Current debt for the district is about $400,000, according to the audit.
District treasurer Bruce Steenrod said he was not surprised by the results of the audit.
Anytime expenditures are over appropriations there is a concern
but there's not a whole lot we can do Steenrod said.
Federal Hocking's former treasurer, Steve Garris, was overpaid by more than $400 because numbers were accidentally transposed when calculating his salary, Steenrod said. The district also failed to record utilities, gasoline and tire purchases at the end of 2006.
The bookkeeping errors were easily detected in the audit because of the district's low fund balance, Steenrod said, adding that constant changes in procedure ' including the employment of three different treasurers in the past year ' led to many of the errors.
Federal Hocking failed to complete a five-year forecast in 2006, according to the audit, an action that placed the district into fiscal watch in March.
The district has until the end of April to create a plan to minimize the debt. At the end of July, the state will place the district into fiscal emergency if administrators do not submit a plan, said Emily Frazee, deputy press secretary for the auditor's office.
The school board sent a letter after its March meeting informing the Ohio Department of Education that the district would not be able to create a plan, Steenrod said.
Administrators suggested several ways to minimize the debt, such as pay-to-play sports, which could collect $12,500, a decrease in coaching or advisory positions, a transition of some paid positions to volunteer work and the combination of schools into fewer buildings, Steenrod said.
The only board action to reduce the debt was cutting 18 positions, 12 of which were teaching, at its February meeting. Administrators projected the cuts could save the district $360,000 to $410,000.
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