(The Center Square) – The Office of the Washington State Auditor issued a disturbing report about the Marysville School District’s budget crisis, calling the situation “alarming and extremely urgent.”
An introduction to Auditor Pat McCarthy’s 82-page report released on Monday says the district’s “financial condition has seriously declined, creating substantial doubt about its ability to operate into the future.”
The auditor is urging school leaders to take immediate action.
“This is the most alarming audit of a public school’s finances in 17 years,” McCarthy said in a news release. “Local leaders have a financial and a community responsibility to right their ship.”
As previously reported by The Center Square, MSD has undergone months of financial difficulties, which prompted a whistleblower investigation and administrative resignations in recent months.
State Superintendent of Public Instruction Chris Reykdal directed an oversight committee to investigate and set an Aug. 16 deadline for the committee to make recommendations on what to do about the district’s bleak financial picture.
OSPI says that may include corrective actions, placing the district under enhanced financial oversight, and/or dissolution of the district.
Since August of last year, the district has been in so-called “binding conditions,” meaning it must work with the state to solve its budget crisis. Marysville is the largest school district in Washington to ever enter into binding conditions.
The state audit report notes that while many school districts have struggled with challenges associated with the end of pandemic-era emergency funding, declining enrollment and increased expenses, the issues in the Marysville School District have resulted in a uniquely perilous financial position.
The audit not find any “deficiencies” in the design or operation of internal controls, but did point to three major issues: a double levy failure in 2022, declining enrollment over nearly a decade, and “the District experienced staffing transitions in key decision-making roles, which amplified these challenges.”
Among the recent staff transitions is the 2022 appointment of Superintendent Zac Robbins, whose contract was renewed in February, despite an online petition signed by more than 1,000 people protesting the renewal.
MSD’s former executive director of finance and operations has also been replaced. Dr. Lisa Gonzales filed a whistleblower complaint citing “unethical behavior.”
In a letter to OSPI, Gonzales wrote, “I was hired to be a steward of taxpayer dollars and need to speak up on these matters of public concern.”
Days after submitting her letter, Gonzales was told her contract would not be renewed.
Gonzales called out Human Resources Director Alan Cooper, claiming that the HR department is “not a place where any of my staff can go to report problem behavior.”
Days after the letter, the district announced Cooper was resigning.
A few weeks after that, Marysville School Board President Wade Rinehardt resigned, following a parent-led effort for his recall.
Then late last month, MSD’s in-house lawyer was placed on leave.
On July 25, a districtwide email informed staff Claudette Rushing was on leave “for an undetermined period of time,” but no other details were provided.
The school district is facing another challenge. The district was informed in March that its current insurance provider would no longer represent them as of September 1.
MSD expects higher rates once a new provider is identified but has yet to receive a written letter of commitment showing insurance is in effect for the 2024-2025 school year.
Connor Krebbs, acting president of the Marysville School Board, issued a “Call to Action” letter Thursday night, which was posted to the Marysville Community Coalition Facebook page.
It reads, in part, “As we navigate these financially challenging times, we must face the reality that additional cuts will be necessary to ensure the sustainability of our educational programs. This includes considering options like consolidating schools and making other difficult budgetary adjustments.”
MSD is required to provide a balanced budget for the 2024-25 school year by the end of this month.