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Fridley adopts 2026–27 budget after finance deep dive on $11M transportation tab and coding errors
Summary
Trustees adopted the 2026–27 budget after administration outlined ongoing audit work, an $11 million transportation exposure (magnet, special‑education and homeless services), CEDRA special‑education coding errors, and steps to rebuild finance capacity; budget adoption passed by roll call.
The Fridley Public Schools board on June 16 adopted its fiscal year 2026–27 budget after a detailed finance presentation that flagged significant transportation costs, ongoing audit items, and repeated special‑education coding errors administrators said they are correcting.
Finance staff said 2025–26 transportation costs are running at about $11 million in preliminary accounting (invoices remain outstanding). The district highlighted three major pressure points: magnet transportation (district-paid magnet routes that will be reimbursed through ISD/consortium payments but currently total roughly $2.7 million for the year), special‑education transportation (reported near $2 million, with state reimbursement reduced in prior legislative changes from 100% to 95%), and transportation for homeless students and youth in transition (reported at $1.4 million so far, with month‑end estimates that could push it toward $2 million). Administrators said the monthly bills affect cash flow because reimbursements arrive later in the state payment cycle.
The administration also reported identifying roughly $960,000 in a prior-year coding error related to magnet transportation reimbursements and said it has asked MDE for reimbursement and is awaiting MDE review. Separately, staff described recurring coding errors in the CEDRA special‑education reporting system (disability categories, placements and staffing) that have reduced funding levels; administrators are performing line‑by‑line corrections and will pursue any allowable retroactive adjustments with MDE.
To rebuild technical capacity, the district has contracted Brady Hoffman for comptroller-level support and is working with Ray Queener to train finance staff and strengthen internal controls. Administration described a $2.2 million prior-year construction‑coding problem in which items that should have been charged to bond series 224A were carried in the general fund and said some funds have been recouped during review.
Despite those headwinds, trustees approved the proposed 2026–27 budget on a roll‑call vote. Administration said the budget and monitoring will continue to change as audit items and remaining invoices are finalized; the audit team has requested additional documentation and is working with MDE on timelines.
Officials urged steps to standardize transportation billing, use transportation strategically for enrollment, and press the legislature or state partners to improve the reimbursement timing for transportation obligations.
