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Heart Butte School District in $3.5 million deficit, may not keep school open in fall – Daily Montanan [1]

['Nicole Girten', 'More From Author', '- January']

Date: 2024-01-06  

The Heart Butte School District may not be able to continue operations in the fall, directly impacting 188 children in the small community, after the district discovered it may be in a $3.5 million deficit by the end of the year, with $1.45 million in accrued debt because of mishandled district funds and misreported district payroll taxes and retirement.

The $3.5 million deficit includes current costs, and the district said the financial burden may be too high for the school to keep its doors open, according to a district statement released Saturday.

“Despite anticipated revenues, along with additional COVID funds over the past three years, it is expected the district may not have the resources available to continue operations in the fall,” the statement said.

The district is slated to decide to let go of nearly half of its staff, 31 employees, at an upcoming school board meeting in one of its first steps to attempt to reduce costs.

“This is a first action in a list of proposed steps to reduce district debt and expenses, attempting to save the district from having to close its door due to an inability to pay payroll and other operational expenses while minimizing the impact on students by keeping classroom teachers in place,” the statement said.

Terminations include 11 teacher’s assistants, two mental health professionals, a substitute art teacher, the sub-administrative secretary, a truancy officer and 15 custodial, maintenance and kitchen staff members.

There are also five staff employees resigning, including two teachers, the athletic director, a truancy officer and Acting District Administrator Shannon Augare. In his resignation letter, Augare said Principal Sandi Campbell would assume his duties as administrator until the district makes its selection.

The discovery of the district’s financial turmoil resulted from a financial audit, which started in September after the school board placed Superintendent Mike Tatsey on administrative leave.

The statement said a district employee used district funds to purchase $70,000 in cash gift cards for personal use, with at least 40 district purchase cards, or “P-cards”, which function like a credit card, making undocumented potentially personal purchases for fuel and groceries.

Tatsey previously confirmed to the Daily Montanan staff at the school had tested positive for drugs and last year Blackfeet Family Services removed children from a group home Tatsey oversaw.

The district requested all P-Cards be returned, but 20 cards remained in circulation and had to be canceled, the district said in its statement. Following the cancellation of the cards, the district was directly charged $13,000 for cash gift cards purchased at local grocery stores and there was an attempted purchase for another $7,000 in unauthorized purchases for cash gift cards.

The district has charged $300,000 to its credit card issuer without prior documentation, leaving the district to guess what the charges were for.

The district’s failure to withhold taxes, withhold or report retirement contributions from employee’s payroll, means the school may be liable for $500,000, part of the $3.5 million total the district might have to pay.

Community and board members have questioned the school’s financial decisions, for example, when the district had to write a check for $112,000 for P-cards. Board member Edith Horn-Wagner previously told the Daily Montanan a group of teachers had to come back early from a trip because their cards were disabled and it was unclear how many cards were distributed.

Horn-Wagner also said Tatsey had spent school funds on rodeo equipment for things like bucking chutes and panels used for rodeos, which can cost thousands of dollars.

She said the district loaned out the equipment, but got called out by community members for not inventorying it properly or having a memorandum of understanding about who was permitted to use it.

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[1] Url: https://dailymontanan.com/2024/01/06/heart-butte-school-district-in-3-5-million-deficit-may-not-keep-school-open-in-fall/

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