Special‑education costs and negative tuition fund top Appoquinimink audit concerns; district to build reserve

Subject‑matter experts highlighted that the district’s tuition fund was effectively negative going into fiscal year 2026 because of a roughly $1,500,000 payable to Christina School District for FY25 services. The report recommended creating a tuition carryover reserve sufficient to cover at least seven payrolls and startup costs; experts estimated that reserve at about $4,500,000.

Trustees asked for clarity about how payroll carryover is calculated and whether payroll funded by tuition or federal grants is included. Experts explained that the state’s financial position report measures state and local discretionary funds and excludes tuition tax funds; payroll paid from tuition or federal grants is therefore handled separately. ‘‘It’s a fair amount. It’s not an easy line item to budget,’’ one expert said, noting the district receives partial reimbursement from the state for some outplacements but can be exposed if the state denies reimbursement.

The workshop also covered interdistrict billing. An external expert, Scott Kessel, said the district may have left about $50,000–$60,000 per year unbilled under the New Castle County pre‑K MOU; the director of finance acknowledged the issue and said she would provide a definitive accounting. District leaders said they have implemented reconciliations and are setting up standing processes to track unit counts and tuition balances, with the goal of reporting tuition fund balances to FAC, superintendent and board throughout the year once controls are in place.

No votes were taken; the board requested timelines and follow‑up materials to clarify carryover calculations and billing practices.