Northumberland schools report $251,316 maintenance‑of‑effort shortfall; state review underway

Assistant Superintendent Karen Leslie told the Northumberland County Board of Supervisors that Northumberland County Public Schools may have failed to meet a federal maintenance‑of‑effort (MOE) requirement for special education spending in fiscal year 2023–24, leaving a potential shortfall of $251,316.43.

The MOE requirement, Leslie said, obliges local school divisions to spend the same or more local (and local+state) dollars on students with disabilities year to year. Leslie and Jessica Rogers, the division’s director of special education, reported they completed a line‑by‑line review of payroll and expenditures and submitted materials to the Virginia Department of Education for validation.

Rogers said the division located $2,063,523.87 in qualifying local expenditures for FY2023–24, compared with the prior‑year local figure of $2,325,231.08 reported on the state annual school report. That gap produced the $251,316.43 shortfall, Rogers said.

Leslie and Rogers told the board they had worked “over the past few days” with VDOE staff and finance specialists; VDOE granted at least one extension to allow the division to assemble and explain its records. Leslie said the department has meetings scheduled with VDOE representatives to walk through the supporting spreadsheets and source documents.

Board members pressed for the consequences if VDOE does not accept the division’s accounting. Leslie said there are four statutory tests VDOE applies; with the division’s current numbers it likely would fail the first two tests, which would trigger repayment of the affected federal funds. Rogers said there is “some hope” the division could meet test 4 through allowable exceptions (for example, staff turnover or reduced enrollment) but cautioned that VDOE must accept the documentation before any result is final.

Leslie said the division is investigating whether a calculation error in prior years’ MOE reporting may have inflated the base figure and helped create a ‘‘snowball’’ effect. She also said the division has filed for and received extensions from VDOE while compiling an unusually detailed reconciliation of payroll and special‑education line items.

Board members asked whether repayment would affect the school division’s next budget. Leslie estimated a worst‑case effect “a little under maybe $700,000” on the FY2026 budget if grant revenue were lost and additional liabilities materialized; she stressed that figure was a rough estimate pending VDOE’s determination. The division also told the board that a loss or reduction of the federal allocation could affect teacher salaries and benefits paid from grant funds.

The board did not take any formal action on the item at the meeting; Leslie said the division will continue to work with VDOE and report back after the agency’s review.

Ending: Leslie asked for patience while the division works with VDOE to reconcile the numbers and said the division will brief the board again after the scheduled VDOE review meetings.