Prosser School District board told accounting corrections, $243,000 OSPI recovery and widening gap could force budget extension

Drew, the district's business and operations lead, told the Prosser School District Board that recent accounting corrections and a required recovery from the Office of Superintendent of Public Instruction will materially reduce the district's fund balance and could force a budget extension this summer.

"That amount is $243,000, which is unfortunate," Drew said when describing OSPI's safety-net repayment demand after the district was found to have been overpaid. He also explained a separate F196 correction that removed roughly $200,000 from the district's beginning fund balance because grant revenue had been double-counted across fiscal years.

Those adjustments come as the district projects expenditures of about $46.2 million for the year compared with budgeted spending of roughly $44.6 million, a gap Drew described as "about a $1,600,000 difference" that will require a budget extension to preserve the board's capacity to spend. Without action, Drew warned, the district could finish "in the red" and face state-imposed binding conditions.

Why it matters: The board must approve any budget extension before the district spends beyond its adopted authority. Drew said the district is examining every possible option to close the shortfall, including maximizing grant dollars, recoding expenses where appropriate and trimming accounts payable. He added the district will work with OSPI and the ESD on timing and transparency: the district will post the corrected F196 alongside the original so community members can see both versions.

Board members emphasized urgency. One director framed the challenge succinctly: "At the end of the day, we have 5 months to shave $665,000," reflecting the short window to reduce projected deficits before summer budgets conclude.

Drew outlined next steps: the district is preparing budget workshops for May (enrollment and revenue) and June (expenses), will present a recommended budget extension in June or July based on monthly averages, and plans to begin paying down a June ' '25 payable balance by August. He also noted changes in state apportionment timing stemming from recent legislative action could shift cash flow in May, June and July, which he will incorporate into updated projections.

The board did not take final action on a budget extension at the meeting. Drew said the district expects more detailed monthly data and will return with specific extension proposals and an explanation of grant versus general-fund impacts at a future meeting.