Appoquinimink review finds $4.1 million overstatement in carryover; board approves bond note, amended revenue budget

Consultants Scott Kessel and Chuck Longfellow told the Appoquinimink School District Board of Education on Oct. 7 that a financial position report submitted in May overstated the district's discretionary carryover by roughly $4.1 million — reporting $7.9 million when the actual discretionary carryover was about $3.8 million.

The finding came during a detailed financial review the board requested after year‑end discrepancies surfaced. Longfellow and Kessel said the overstatement stemmed from misallocated balances that mixed discretionary and non‑discretionary funds and from underestimated salary and non‑salary costs: salary expenses were understated by about $2.1 million, non‑salary by about $2.5 million and revenue by roughly $0.5 million, producing the net $4.1 million difference.

The board approved two financial measures tied to the findings. Members voted to adopt a bond anticipation note of $5,507,741 at an interest rate presented as 4.09% per annum for the local share of the district—s FY26 capital program, with future conversion to 20‑year bonds at the state bond sale rate. The motion to adopt Longfellow—s proposed note was moved by Mr. Abrams and seconded by Mr. Higgins; the motion carried on voice vote. The board also approved an amended preliminary revenue budget for FY26 that reflected atypical tax‑receipt timing tied to county reassessment and litigation.

Why it matters: Longfellow said the district must separate discretionary state and local funds from non‑discretionary funds in budget reporting so year‑end carryover is correctly reported and so the district can reliably meet the state—s required discretionary carryover (noted during the presentation as $4.2 million). Board members and consultants emphasized immediate steps already under way — tighter purchase controls, recoding of discretionary salary to non‑discretionary accounts where appropriate, and a push toward budgeting software and clearer Chart of Accounts documentation — and they asked administration to report progress at the board—s upcoming finance workshop and in November.

Supporting details: Consultants listed six major observations and 24 recommendations, including reinstating monthly cash‑flow and salary trackers; clarifying roles and instituting multi‑level review to avoid a single point of failure; implementing more rigorous, proactive planning for program costs and contracts; and rebuilding the tuition tax carryover (Longfellow recommended a roughly $4.5 million tuition reserve to cover payroll through October). Longfellow and Kessel said the district had already committed to roughly $2.5 million in discretionary spending cuts and that the actions had reduced the immediate risk of a Department of Education financial recovery team being appointed.

Board action and votes at the meeting: The board approved the bond anticipation note as presented (motion adopted and carried). The amended preliminary revenue budget for FY26 was also approved on a motion by Mr. Abrams, seconded by Mr. Higgins. The monthly financial report for August 2025 — presented by Ms. Stewart and approved earlier in the meeting with the Financial Advisory Committee—s concurrence — passed with four ayes and Ms. DeWitt recorded as abstaining; the board asked administration to provide updated cash‑flow numbers at the November meeting because of county tax‑bill delays and potential state loan options.

What—s next: Administration agreed to provide a status update at the district—s finance workshop Oct. 28 and again at the November board meeting that will list each recommendation and explain how the district is implementing it. The board also directed continued attention to tuition fund balances and to clearer in‑year budget amendment approvals.