Utah education officials make $25M school funding mistake

The following Post references an article that appeared in The Salt Lake Tribune that emphasizes the need to check our work as Business Officials.  Each year Business Administrators are tasked with extremely vital analysis and projections that directly impact tax levies, state aid and other finacial outcomes for their districts.  This work must be flawless as the consequences are substantial. 

Regardless of the level of expertise or knowledge associated with the task, we must insist on a second pair of eyes in checking and rechecking critical spreadsheets and reports prior to finalizing and transmitting our work.  Often, as a double check, I recommend handing the document to another team to verify and confirm the accuracy.  While mistakes do happen; when it comes to finance often the error may become unrecoverable from the perspective of acountability, which in this case led to the resiginations, similar to the NJ Race to the Top fiasco in 2010.

Education » State leaders say schools won’t likely be hurt by the miscalculation, which leads to the resignations of two top finance officials.

By Lisa Schencker

| The Salt Lake Tribune

First Published Apr 11 2012 11:54 am • Last Updated Apr 11 2012 11:22 pm

A miscalculation at the State Office of Education has led to a $25 million mistake in Utah’s education budget for next school year — and the resignation of two top finance officials.

Education  leaders, however, say they don’t expect the potential shortfall to hurt schools or districts. State leaders are considering solutions ranging from using education money expected to be left over at the end of this school year to calling a special legislative session.

"We committed to fund [enrollment] growth and this is an important part of growth," said Senate Budget Chairman Lyle Hillyard on Wednesday. "We would hope to get it fixed, and I think that’s going to be our first priority."

The $25 million represents less than 1 percent of the state’s overall $3 billion-plus education budget.

The problem was that the state office essentially underestimated the number of students expected in schools next school year. The correct number will cost the state $25 million more than anticipated.

State Superintendent Larry Shumway attributed the mistake to "a faulty reference" in a spreadsheet. He emphasized that no money was misappropriated. He called the mistake "significant" but "manageable."

Still, he said, "I don’t want to say in any way it’s an acceptable error." He said the seriousness of the problem is reflected in the consequent staffing changes at the state office.

Todd Hauber, associate superintendent, and Larry Newton, director of school finance submitted their resignations due to the blunder.

Hauber said he learned of the gaffe March 29, told the state deputy superintendent about it that same day, and voluntarily submitted his letter of resignation the next day. He’ll continue to work until new staffers can be hired.

"There will be no school that will not receive money because of the error, so from that standpoint, it’s an unfortunate calculation or forecasting error, but one that can be managed," Hauber said Wednesday. "But on the other side, it’s an error that shouldn’t have happened in the first place. It’s an error that should have been caught earlier in our regular review process."