Western Heights school district shorted $7.3 million in state aid over 11-year period
The Western Heights Public School District was shorted more than $7.3 million in state aid payments over an 11-year period because of an error in the way the Oklahoma State Department of Education calculated payments due under the state aid formula, a state audit has determined.
The southwestern Oklahoma City school district was actually shorted more than that, but auditors have not yet calculated underpayments for earlier years because of incomplete records, officials said.
The school aid formula error, which impacted school districts statewide, was acknowledged by state education officials in 2014.
The mistake resulted in many districts, such as Tulsa, Norman, Moore, Broken Arrow, Union and Jenks, receiving too much money over a period of more than two decades.
Other districts, such as Western Heights, Oklahoma City, Mid-Del, Edmond, Putnam City, Crooked Oak and Millwood, received too little.
The overpayments and underpayments for some of the districts totaled millions of dollars.
The school aid formula was corrected by the state Education Department in fiscal year 2015, but the department has yet to take action to recoup overpayments from districts that were paid too much or to reimburse the districts that were paid too little.
Several of the districts that were shorted filed lawsuits against the state schools superintendent and other officials in 2016 in an attempt to recoup their underpayments.
Litigation remains pending, with the Oklahoma Supreme Court currently being asked to decide whether state Education Department officials can determine the amount of underpayments and overpayments on their own or whether state law requires an audit by a certified public accountant or public accountant.
“This is a complex issue with potentially serious ramifications — both positive and negative — for taxpayers and school districts in all 77 counties. When made aware of a potential error that had existed more than 20 years, Superintendent (Joy) Hofmeister took action in her first days in office in 2015 to ensure there could be none going forward. This audit confirms we have not repeated the error and that subsequent calculations are correct,” said Education Department General Counsel Brad Clark.
He said that several state agencies are being represented in the case before the state Supreme Court. The departments involved are the state schools superintendent’s office, Education Department, auditor’s office, treasurer’s office and Tax Commission.
Rather than waiting on the Supreme Court to rule on the issue which has been pending since June 2018, the Western Heights Board of Education decided to pursue a different strategy and asked for a state audit, said Jerry Colclazier, the district's attorney.
"We're a very poor district out here even though we have agriculture," said Western Heights Superintendent Mannix Barnes. "This money would drastically help our district and our kids. That's why we're fighting so hard."
Barnes said the $7,367,550 in underpayments to Western Heights documented by state auditors is only a portion of the money the district is due. The underpayments began in fiscal year 1992 but auditors only examined payments beginning in fiscal year 2004 because complete records aren't available for earlier years, he said. Barnes said Western Heights still wants auditors to determine underpayments as best they can for prior years because the district is due that money.
The school board also wants the district to be paid interest on the money it was shorted, he said.
Barnes said he hates that the error happened and that some school districts may be required to give back overpayments, but believes his district should not be punished because of the error.
Under state law, a process exists for the state Education Department to recoup overpayments to school districts by withholding money from future state aid payments over a period of years.
At one point, a mediated compromise was reached between school districts and state education officials that called for school districts that were shorted to be paid back for a portion of the year's they were underpaid using money that would be withheld over a period of years from districts that were overpaid.
That proposal was presented to the state Board of Education in executive session, but the board failed to take action on the proposed settlement.
"They could have fixed the problem," said State Auditor and Inspector Cindy Byrd. "They had several executive sessions and they just walked away from the mediation even though it was clear from the formula that many schools were underpaid and many schools were overpaid."
Byrd said so far Western Heights is the only district that has requested an audit on how much it was underpaid, although many districts face the same issue.
Byrd said her office has no plans to audit every school district.
"We are not going to perform a costly audit to go back and tell the State Department of Education what they already know, and that's the fact that these schools have been underpaid," Byrd said. "It doesn't take a rocket scientist or an audit to go back an recalculate this formula and make it right."