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Ohio school system faces $90 million shortfall due to COVID-19 expenses – Ohio

(The Center Square) – Continued hiring and millions in construction projects pushed an Ohio public school system toward a financial abyss, including a projected $90 million deficit by 2028, according to State Auditor Keith Faber.

A new state performance audit shows that the Mt. Healthy City School District in suburban Cincinnati has hired dozens of new teachers and staff and advanced $18 million in construction projects without formal plans or funding to maintain operations.

Faber said the system should consider joining another district.

“There appears to be a failure of leadership, given the mismanagement of public resources and the financial mess the district now finds itself in,” Faber said. “Mt. Healthy schoolchildren and their families are not being well served – it may be time for Mt. Healthy City School District will work with other school districts to meet its educational obligations to the community.”

The issues and state recommendations were part of a new performance audit recently released by the Auditor of State’s Ohio Performance Team. The audit began in December after the district pushed back the process and the state delayed it by several months in August, Faber said.

According to the report, the district’s spending on salaries and wages increased by nearly $9 million in fiscal year 2024 compared to 2021, mainly due to an influx of one-time federal COVID-19 money.

“The district chose to hire new teachers with temporary funding from the federal government to address learning loss due to the COVID-19 pandemic,” the report said. “While hiring additional staff is not in itself a problematic decision, the district did so without a strategic plan to retain or eliminate these teaching positions once funding expires.”

The report also says the district borrowed $10.5 million to build a new early learning center for preschoolers and kindergarteners, despite having ample building space for those grades. The district also used $7.4 million in COVID-19 money to fund a new Culinary Arts Center, without a plan for ongoing funding to pay for staff, supplies and other costs.

Finally, the report said the district’s staffing levels were higher than comparable schools, per student and per building. It had 175.83 full-time teachers, which was 45 more than comparable systems.

At the time of publication, The Center Square was unsuccessful in its request for comment from the district.

As previously reported by The Center Square, the state placed the district in a state of financial emergency in April due to a $10.8 million shortfall in the operating fund for the current fiscal year.

Since then, the Ohio Controlling Board has approved a $10.8 million loan from the Ohio School District Solvency Assistance Fund for the district.

The district has said changes to the state funding formula and reductions in state funding allocations affected the budget. Also, the district’s property tax revenues have declined and are expected to continue to decline.

At the same time, the district said total spending increased by $2.4 million each year. The company says employee salaries and benefits are two of the spending categories that are expected to continue to grow.

According to reports from Fox19 in Cincinnati in April, the system planned to lay off 80 employees. The district said it expects to split 67 of its 227 teachers, nine administrators and four exempt staff positions among five schools by the end of the year.