State officials are reviewing the financial records of the Ennis school district after several complaints that its board purposely accumulated adult education money to pay a big chunk of a new $9 million building.
The Montana Office of Public Instruction has received complaints from district residents that Ennis schools built up more than $4.3 million in adult education money but offered only minimal classes, said Denise Ulberg, school finance division administrator for OPI. This year, the district began construction of a $9 million building and is using the adult education money to help pay for it.
“From what we’ve seen on their budget reports, they seem to be accumulating money in that fund,” she said. “We asked them what they’re doing.”
Officials this spring sent a letter to Doug Walsh, Ennis superintendent, asking about the large pot of money.
But Walsh said in a letter to OPI that the expenditure is justified. Ennis’ new school building will include an adult education center that will offer a far broader array of classes, Walsh said.
Ulberg said while the large pot of money is unusual, the district has consistently had clean audits in recent years. She said state law allows districts to accumulate money in different funds and in some cases transfer it to others as long as it’s used for the initial purpose.
Even if the transfer passes muster, it’s wrong for the district to be playing a giant shell game with taxpayers’ money, said David Kelley, a Madison Valley resident and retired lawyer. He said the district collected that money under the pretense that it was for adult education, not as a building reserve fund.
“You can’t be moving money around like Goldman Sachs,” he said. “We’re in the process of building a $9 million school without ever having voted on it.”
But Jim McNally, a school trustee, disputed that the board has ignored the public while planning the building. He said the construction project was previewed in several public meetings.
And voters this spring approved renewal of a building reserve levy. The district has multiple building reserve levies and taxpayers have consistently voted for them.
In addition, McNally said the move to use adult education, as well as some transportation money, to pay for the new building is a good decision because it will save millions of taxpayers’ dollars.
“The present board and previous boards have been (saving) in anticipation of having to do something with buildings and parts of those buildings are for adult ed use,” he said. “Doing this over time has saved the taxpayers a little over $4 million if we were to pass a bond at this point in time with 4 percent interest over a 20-year bond.”
The new building is slated to open next year. The first phase consists of administrative offices, a middle school and cafeteria.
Ulberg said OPI officials will issue a letter soon stating whether they have found the expenditures legal.