New Orleans Schools Face $36M Shortage From Accounting Issue

Schools in New Orleans Parish are facing a $36 million shortage in funding due to an accounting error

Schools in New Orleans Parish are facing a $36 million funding shortage due to an accounting error. Although the New Orleans Parish School Board is attempting to devise a plan to resolve $20 million of this debt, the remaining $16 million is currently unaccounted for.

According to WWLTV, the school board plans to vote on a plan to allocate up to $5 million of that debt during the week of Nov. 18.

In October, district officials told reporters that the figure they received in March, which was intended to help them budget for next year, “was likely inflated due to a miscalculation.”

However, the City of New Orleans has not yet given the district an updated number, so they are still working with unofficial numbers. The board and the city have been working in concert to confirm sales and property receipts. Some leaders, like Joe Keeney, a founder of 4th Sector Solutions, a financial consulting firm that works with 15 of the city’s charter schools, said that it won’t help them balance the budget.

“It will help with cash flow, but not with the underlying problem of balancing the budget,” Keeney told Nola.com.

Caroline Roemer, the President of the Louisiana Association of Public Charter Schools, said there will likely be some debate as to whether the schools will have to pay back the $15 million or not, and also said they didn’t know exactly how bad the discrepancy would be.

“What we knew was classrooms were going to be impacted, budgets were going to be impacted, but what we didn’t know was how bad it was going to be,” Roemer told the outlet.

According to Taslin Alfonzo, a spokesperson for NOLA-PS, the district was initially supposed to send schools reduced payments in October, but held off after school leaders informed the district that they needed time to adjust their budgets.

The Rooted School, a small charter high school with only 24 employees located in Pontchartrain Park, laid off four employees per United Teachers of New Orleans.

According to Nola.com, the school’s leadership indicated that the dismissal of the employees (its front office manager, director of curriculum and instruction, director of the school environment, and a custodian) is a move to help shield The Rooted School from any further financial repercussions related to the inflated tax revenue projections from the school district.

“While we regret that we are forced to take critical actions,” The Rooted School leaders said in a statement, “it is our responsibility to be stewards of our school’s resources, especially when they are limited by actions we did not take or foresee.”