By Fallan Patterson

Staff Writer

Osceola County School District officials are awaiting word from the state on how much money the district will have to pay back after funds designated for schools educating children from the lowest-income families were used improperly.

Interim Superintendent Terry Andrews estimates the payback between $171,000 and $220,000 mainly due to Title 1 money incorrectly funding two alternative schools, COPE and Endeavor.

“It’s easy to make a mistake, but it’s a very costly mistake,” Andrews said.

The district also may be financially penalized for allocating more money to schools with fewer students that qualify for free and reduced lunch – a prerequisite for Title 1 designation – rather than adhering to the “rank and order” provision in the Florida Department of Education’s (FDOE) Title 1 plan.

A school is designated Title 1 once it has more than 75 percent free-and-reduced-lunch-qualified student. Federal money is distributed to states education departments, which then filter funds to the districts.

“We have to spend the money a certain way,” Andrews said. “(FDOE) found some discrepancies (in an audit) and we have to correct that.”

Title 1 funds serve 19,000 students in 24 schools in the district, Dana Schafer, district spokeswoman, said.

Funding repayment

While Andrews, who replaced former superintendent Michael A. Grego April 12, said programs will not be cut, and any money the state requires be refunded would come out of the district’s general funds budget.

“It’s not something we look forward to,” Andrews said, adding he expects to hear from state officials “anytime.”

Andrews said he hopes state officials would allow the district to direct the repayment back into district Title 1 schools rather than return the funds to the state, however the money will still be removed from the district’s general fund.

“That payback will have to be built into our budgeting process,” Schafer said.

School Board Chairman Cindy Hartig said she was “disheartened” by the audit findings and claims the Title 1 problems were kept from the board, even after she asked Grego and other district officials about them in March.

“(District leaders) knew in November we were not in compliance with Title 1,” she said “At no point in time was the board made aware of these discrepancies. I believe when I asked the question at the meeting, this should have disclosed to us and it was not.”

Hartig said she found out about the problem two weeks ago when district finance staff called her for a meeting. The audit was completed in early December.

“The board and the community were lied to,” she said. “These are the kids, the schools who need it the most. We’re not helping them; we’re hurting them.”

Other findings

Other issues with the district’s Title 1 process were outlined in a 44-page report, which at one point, Andrews said, totaled $800,000 in possible repayment.

However, after explanation by district officials, those issues will only require system improvement plans, which were due to the Department of Education April 27 for approval.

These findings include the district not allocating funds to Title 1 private schools in the same amount outlined in the district’s approved Title 1 application.

“While we are going to remove the financial consequence, the (district) should revise procedures to ensure that funds are allocated equitably to participating private schools,” Sara Dixon, director of the department’s Office of Federal Programs, wrote in her April 13 report.

Additionally, a plan was required for another discrepancy that ensures schools “in need of improvement” reserve a minimum of 10 percent of their allotted funds for “high quality” professional development. The report states Chestnut Elementary School in Poinciana failed to set aside all of the required 10 percent, requiring a system improvement plan.  

“We’re putting things in place where it won’t happen again,” Schafer said.