Dallastown Area School District found a $2.5 million shortfall in its budget because of an error, placing increased pressure on its finances in the future, spokeswoman Nicole Montgomery said.
The error stemmed from a debt service payment made in May, she said. The expense was missed when the district projected its budget for the 2020-2021 school year, resulting in an incorrect estimation.
The debt service is the equivalent of a mortgage payment for improvements of buildings and property, such as the Loganville-Springfield Elementary School renovations and additions, Montgomery said.
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The business office brought the mistake to the immediate attention of the superintendent, board president and board finance chairman when it was uncovered, she said. An independent analysis, conducted by the school’s auditor, Boyer and Ritter LLC, confirmed the problem was a projection error.
“The error will place increased pressure on the district budget moving forward,” she wrote in an email.
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The administration and school board will closely monitor finances through the course of the school year, Montgomery said. The district might defer expenditures that might not be necessary at the present time.
Taxpayers will not see a direct impact at this time, Montgomery said. She noted that the district did not have a tax increase for the current school year, making it the eleventh time in the past 13 years with no millage rate hike.
The district’s revenue is $109,110,673, and its expenditures are $111,990,761.
This article originally appeared on York Daily Record: $2.5 million projection error puts Dallastown Area School District in a budget hole