Treasurer says $3.5 million cash error left Mount Healthy facing deficit; board approves financial recovery plan

An interim district treasurer told the Mount Healthy City Schools Board of Education that the district's June 30, 2023 general-fund cash balance had been misstated by roughly $3.5 million, a discrepancy she said was later corrected on a resubmitted forecast and that has left the district in a multi-year deficit position.

The treasurer (name not specified), speaking during the board's regular meeting, said she pulled the district's posted five-year forecast from the Ohio Department of Education website and ran a bank-style cash summary report for June 30, 2023. "I was shocked that our balance was 4,900,000.0. It was not that 8,004 8,000,400 number," she said. "It is my opinion that this district was really misled by whoever was treasurer. ... The board and Valerie and her team really were misinformed of the finances." She told the board her last day would be the upcoming Friday and that Board Member Chuck Sol would take over fiscal duties.

Why it matters: the board must submit a five-year forecast to the Ohio Department of Education (ODE) and also produce a Financial Recovery Plan (FRP) when state review is triggered. The misstated cash figure feeds into the July 1 starting balance for subsequent forecast years and, the treasurer said, reduced the district's projected available resources by about $3.5 million across future years.

What the board did: trustees voted to approve the five-year forecast as presented and to adopt the Financial Recovery Plan workbook and narrative submitted to the state. Board members present recorded affirmative roll-call votes on the forecast and the FRP.

Details and context: the treasurer walked trustees through a series of forecast filings: the November 2022 submission showed substantial general-fund carryover; a May 2023 forecast was approved with a state letter acknowledging the district's plan; the November 2023 forecast contained the higher (and later corrected) cash number; a resubmission in February corrected the figure downward. "They did update it, and they did correct it," the treasurer said, but added, "you just lost $3,500,000 in cash in a moment, basically." She said she had raised the discrepancy with state officials.

Board discussion and next steps: board members and staff noted the forecast approved at the meeting must reflect a required two-year payback of a state advance; the board also received a supplementary forecast showing the effect of a possible 10-year payback, which would ease near-term pressure but would require state approval. "That decision lies solely with the commission in the state of Ohio," a district administrator (Valerie, role not specified) said, describing the process by which the state could extend the repayment term to 10 years. The board was told it can submit an updated forecast if a different payback term is approved.

Other items in the finance presentation: the treasurer noted personnel and service reductions already made, and staff presented monthly cash-reconciliation reports and a financial-recovery workbook of proposed reductions. The district treasurer recommended continued monitoring and said some line items in the current-year forecast may come in slightly differently at year-end (for example, certain other-financing sources and capital outlay estimates).

What remains unresolved: the treasurer characterized the core problem as a misrepresentation of the actual cash balance in the forecast filing trustees had received, and she said resolving the resulting budget gap will take time. Board members also approved routine items during the meeting, including tax-rate approvals and multiple personnel and contract items tied to the district's operations.

Votes at a glance: the board approved the five-year forecast (submitted to ODE reflecting the required two-year payback), approved the Financial Recovery Plan workbook and narrative, and approved tax rates for 2026; all votes were recorded by roll call as affirmative by the trustees present.

Ending note: board members were given materials showing an alternate forecast with a 10-year payback and were told they could resubmit forecasts should state decisions change the repayment schedule.