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CFO warns of possible state and federal holdbacks that could affect staffing and after‑school programs
Summary
CFO Brian Wallace said May finances are tracking to budget but flagged preliminary state guidance about 2–6% holdbacks and a federal notice about approximately $6.8 billion in Title I/II/IV withholding that could reduce grant funding for instructional coaches and after‑school programs.
Brian Wallace, the district’s chief financial officer, presented the May finance report at the July 1 Lake Pend Oreille School District board meeting and cautioned trustees about preliminary state and federal actions that could reduce grant revenue next year.
Wallace reported that year‑to‑date revenues and expenditures are tracking close to prior years. Enrollment finished the year up 27 students, and the district may slightly draw on fund balance as budgeted. He said the district has received most state revenue for the year but is awaiting a final state payment that typically arrives later in the summer.
Wallace told trustees the governor’s office asked state agencies to prepare for a potential 2%, 4% or 6% holdback for the fiscal year; using the state Department of Education figures he cited, a 2% statewide holdback would amount to roughly $55 million for the department. He characterized these numbers as preliminary and said their local impact would be proportional to district enrollment.
Separately, Wallace said the federal administration informed states of intentions to withhold about $6.8 billion for Title I, Title II and Title IV programs. The district’s anticipated Title I funding is about $181,000; Title IV supports the district’s 21st Century Community Learning Centers (after‑school) program (Wallace cited roughly $240,000 tied to the CCLC grants), and Title II supports instructional coaching. Wallace cautioned that those programs are staffing‑intensive: “Title I is almost 90% staffing,” he said, and losing those grants would put positions at risk.
Trustees asked for timing and clarification. Wallace said the state decision would likely align with the governor’s final revenue projection and that any federal actions could play out in federal and legal processes; he recommended maintaining a healthy fund balance to bridge possible shortfalls and preparing thoughtful budget responses rather than emergency cuts.
No formal budget action was taken at the meeting. Wallace and trustees agreed to continue monitoring the situation and to plan for possible scenarios.
