A $2.3 million bookkeeping error that went undiscovered for nine months could mean across-the-board budget cuts in the Flagstaff Unified School District.

By failing to post the last payroll in December 2001 to the district's general ledger, FUSD essentially overspent its $53.2 million budget when the fiscal year ended June 30.

The money must be paid back to the state within two years, according to state statute.

But FUSD officials want to petition the Legislature to pay back the overspending over five years at $450,000 a year.

District staff noticed the error two weeks ago when it prepared the district's 2001-2002 financial report. FUSD Superintendent Larry Bramblett reported the deficit for the first time during a special session of the governing board Tuesday.

Tuesday was the deadline for the district to send the financial report to the state. It now has until Dec. 14 to come up with a plan to cover the deficit.

Bramblett said he will propose an across-the-board cut in the budget within the next 60 days. The school board would then consider approving the cuts.

The district is already short $300,000 this year because of low enrollment.

Bramblett said the error occurred

when there was a high rate of employee turnover in the administrative office, which was switching from Arizona Public Schools Computer Consortium's Homegrown to Sunguard's Bi-tech accounting software.

He said the district has nothing to which it can compare its faulty books because the first six months of 2001-2002 financial statements posted at the county level don't match the district's information and the second six months of statements have been delayed at the district level and not posted at the county yet.

Bramblett told the board his plan for avoiding similar mistakes in the future will include: Start keeping accounting books in longhand to check against computer data. Reduce key staff turnover in human resources, accounting and payroll. Find a fail-safe system for posting data. Critically focus on the 2001-2002 and 2002-2003 budgets for about three months.

The district will seek advice from the Citizens' Budget Advisory Committee on the planned cuts and repayment plan. District administrators also will present a monthly financial statement to the board.

The next meeting of the school board is Oct. 22 at 6 p.m. at Leupp School in Leupp.

The district budgets will be squeezed tight for at least five years, Bramblett said, and it's not just due to the deficit.

The district also has to plan for state cuts to soft capital (including textbooks), another health insurance increase higher than 10 percent, a 120 percent increase in contributions to the state retirement fund, and continued problems with low enrollment counts being reported to the state.

"We're in a world of hurt right now," said board member Mary Lord.

Arizona Daily Sun

-- Anonymous, October 18, 2002