Highland Schools $1 Million Matching Grant Shortfall May Be Accounting Error
Highland County officials are breathing a sigh of relief after learning a schools matching grant spending shortfall of $1 million may be just an accounting error.
Up until an April 18th virtual meeting between local and State of Virginia education officials, Highland County was on the hot seat for a cool million dollars owed to the state. And to make things worse, the bill was coming due June 30th.
Minutes after the virtual meeting, a relieved Highland County Schools Superintendent Dr. Drew Maerz described the meeting as “very uplifting.”
It seems, Maerz said, the $1 million county matching short fall may be an accounting mistake, which involved erroneous line-item code numbers for four sources of matching grant revenue noted in the Highland County Annual School Financial Report for FY24.
State education officials now are allowing county school officials to review, amend and resubmit their FY23 financial report by the end of this month. In addition, county officials must do the same with its FY24 report and resubmit it by May 31st.
Maerz said the matching fund shortfall is related to the FY23 construction project for a new roof and HVAC system for the school at a cost of $1 million.
During that fiscal year, county schools received state grants totaling $479,216 in FY24 to reimburse the county government, which helped cover the cost for the FY23 construction project. In addition, county schools received reimbursements of $598,898 in federal grants during FY24 for the construction expenditures incurred in FY23.
It is believed that the construction costs were coded as a transfer, or reimbursement, from the schools to the county. Instead, Maerz and state education officials suspect, the total for the HVAC project should have been coded as an expenditure for the schools.
Maerz said after the April 18th meeting that he is hopeful they can resolve this issue. If it is just an accounting issue, he added, “I’ll own it.”
During an April 16th Board of Supervisors work session meeting, Maerz explained the fiscal problem faced by the county. He submitted a timeline that began in November, when state education budget officials asked Maerz and his staff to “take another look” at Highland County FY 24 financial report.
Maerz was in constant contact with state Department of Education officials, trying to resolve the issue. And in February, he advised Highland County Administrator Jerri Botkin of the fiscal problem.
The superintendent even sought help from two state legislators, who backed an amendment to Gov. Glenn Youngkin’s FY 26 state budget. The legislative move would have waived the requirement for Highland County to pay funds to the state treasury in FY25 due to its FY24 shortfall in local match expenditures. After the amendment failed to make to the floor for a vote on April 1, Maerz decided to report the matter to the board.
During the April 16 work session, Maerz said he believed a coding error could be the cause for the matching fund shortfall, noting his department does not have a fiscal officer like other larger education systems in the state.
Board Member Henry Budinski asked why Maerz had not sought help from the county before now.
Maerz explained, “We were not trying to hide it. We were trying to remedy it.”
In concluding, Maerz told the board members, “I apologize. I wish I didn’t have this to bring to you. I will keep you informed.”
This is Mike Folks with Allegheny Mountain Radio News.
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