Audit discovers overpayment, school district to repay state

RE1J to give back $275,000

An audit by the Colorado Department of Education covering the last five years of Gunnison RE1J School District enrollment revealed $275,000 must be returned to the state. Based on a Department of Education formula that calculates state allocations for instruction, transportation and other student expenses, the audit found the district had over-counted deserved allocations.

Initially, the Department of Education auditor indicated the district could owe as much as $2.2 million, but thanks to a rigorous inventory of district records, district superintendent Jon Nelson and his staff were able to reduce the amount to $275,000.
On January 17, the Gunnison RE1J School Board unanimously selected Jon Nelson for the position of district superintendent. Nelson had been acting superintendent since the departure of Steve Marantino last spring.
Nelson has worked for the district since 1990 and comes to the position from his former role as district finance director. He said the district would advertise for a new finance director within a few weeks.
The audit news is a big challenge and school board member Bill Powell said,“You’re to be commended for taking it down.” Regarding the reduction in the amount of money to be refunded to the state.
Nelson said this was the second time he had been involved in such an audit, and audits can go both ways. “We have received additional funds for kids we’ve missed,” he said.
Such audits are supposed to be conducted every three years, but Nelson said cuts in Department of Education auditing staff had forced the department to audit rural districts like Gunnison RE1J less often.
School board president M.J. Vosburg said such a lengthy interval between audits was problematic for district officials. She proposed that the board make their complaint known to the Department of Education. “I hate to let this go without some comment about how difficult it makes it to do our jobs,” she said.
The board agreed to draft such a letter.
To avoid such problems in the future, Powell said the district should demand timely oversight from the Department of Education. “The only thing you can do is insist they come down every year to do an audit,” he said.
Vosburg suggested that district officials adopt a policy to more accurately count student enrollment and expenses. Nelson said he was already implementing such a strategy. “We are going to provide a series of training seminars for secretaries and principals so we can make sure they understand the importance and accuracy of the data,” he said.
Nelson said he would also recommend that the Gunnison Valley School go from a quarter system to a semester system in order to ensure that valley school students would be enrolled for the requisite amount of time to be counted as pupils by the CDE. Each student must be enrolled for 360 hours per year in order to be counted.
According to Nelson, the $275,000 has to be paid in full or a payment schedule has to be agreed upon within 30 days of the final CDE report. “Otherwise interest accrues,” he said.
Vosburg asked that the board spend the next few weeks identifying possible funding sources within the budget to pay for the shortfall.
Nelson suggested the district could ask to make the payment when its tax revenues were flush next spring. “We will try to pay it back in March, May and June when our property taxes are at their peak,” he said.