A new state audit found that the future of the Marysville School District could be in jeopardy as the financial condition of the district declines.
The report from the Office of the Washington State Auditor, released on Monday, said the eroding financial situation in the district, with approximately 9,700 students, “raises substantial doubt about its ability to continue.”
“This is the most alarming audit of a public school’s finances in 17 years,” said State Auditor Pat McCarthy in a news release. “Local leaders have a financial and a community responsibility to right their ship. The stakes are too high for Marysville and its children.”
The last time a public school district in Washington was in a comparable situation was when the smaller Vader School District dissolved in 2007 after its financial condition deteriorated and a maintenance and operation levy failed.
Revenue decreases in Marysville stem from declining enrollment as well as a double levy failure in 2022, the report noted. Additionally, executive management and the school board have not “taken the necessary steps to guarantee the district can meet its financial obligations.”
Those challenges were amplified by staffing transitions in key decision-making roles, the report added.
Ideally, school districts should have more than 60 days’ worth of operating expenses in their general fund, but at the end of August 2023, Marysville School District maintained only about 18.6 days’ worth of operating expenditures. Recent audits of the district’s financial reports through June 2024 showed more expenditures than funds — a negative balance equaling 11.6 days of operating expenses.
Auditors originally set out to review Marysville’s finances ending in August 2023, but they continued to work through the current fiscal year due to “subsequent events involving the school’s financial condition.”
The Office of Superintendent of Public Instruction and the local educational service district assisted the district in August of last year, after it was unable to submit a balanced budget and OSPI placed it in binding conditions. OSPI then convened a financial oversight committee to work with the Marysville School District.