The DCA Resideo School District School Board at a special meeting approved reimbursements to employees for federal taxes that were incorrectly withheld from health savings account (HSA) contributions and adopted related revisions to the district's 2024'25 budget, board members said.

Board staff framed the issue to members, saying the district discovered HSA contributions had been taxed in June and corrected payroll going forward. "You know that in June, we discovered HSA contributions being taxed, and a correction was made shortly after that to make sure that our July payroll going forward was accurate," a staff member reported. The staff member said the district confirmed with the state education agency that it could reimburse employees for the previous three years, consistent with the statute of limitations.

The reimbursements and budget changes were advanced at the same meeting because auditors were on site to close the fiscal year and the district must complete a fund-46 transfer by July 30 under statute, another staff member said. "Our auditors are actually in-site today and tomorrow. . . . We also have to make our fund 46 transfer by July 30 per statute," the staff member said.

Board members approved an amended motion directing reimbursements for employees who had federal FICA and Medicare taxes withheld from their HSA contributions during the prior period identified in the motion, with the amendment requiring the district to follow legal guidance on the distribution mechanism before payments are made. The board approved the amended motion by voice vote; no roll-call tally was recorded in the minutes.

Officials said the total cost of the reimbursements for the three-year period is about $408,000. The budget revision the board approved included adjustments to capture the reimbursements in the appropriate funds and other cleanups that the staff said total just over $333,000; staff explained the $408,000 figure represents the amount to be reimbursed to employees while the budget-revision lines reflect accounting entries across funds. Staff also noted two unrelated fund cleanups (fund 21 and fund 42) were added to the current revision and that any final cleanup would be done after the audit in August if needed.

Board members moved and seconded the reimbursement motion, and the maker amended the motion to require that the distribution follow legal guidance; a second agreed to the friendly amendment. The board later voted to approve the 2024'25 budget revisions as presented by staff.

The board scheduled further review of the broader package at its next meeting on the 13th, when staff expect to bring additional details. Staff also said they would work with legal counsel to determine the approved mechanism for distributing reimbursements to ensure compliance with guidance.

The actions affect district employees who had HSA contributions processed through payroll and may alter the district's year-end fund transfers; staff emphasized statutory deadlines and the presence of auditors as the reasons for addressing the items at the special meeting.