Oversight may cause $200,000 shortfall for South Putnam
The South Putnam School Corporation recently got some unwelcome news as it was informed of a mistake made on a tax abatement with POET of Cloverdale.
Through an error in the county auditor's office, POET's 10-year tax abatement was not taken into account, thus a much higher assessed value for the corporation was sent to the Department of Local Government Financing (DLGF).
This error could result in a nearly $200,000 shortfall in the upcoming budget.
"The bottom line here is that the way it was sent to the DLGF, who determines all of our budgets, our assessed value was too high because the abatement wasn't taken into account," explained Superintendent Bruce Bernhardt. "It affects the amount of money that we receive in taxes."
Bernhardt went on to say that the error had nothing to do with the corporation's fault or the current auditor Lorie Hallett. However, by having a much higher assessed value for the POET property resulted in the corporation having a much higher assessed value.
"The tax rate that was set now won't bring in enough money for what they had given us in our budgets," said Bernhardt. "The current auditor had contacted DLGF and had explained to them what she had found. I'm concerned the answer is going to be, 'well you have a shortfall and there's nothing we can do about it and you're just out $200,000.'"
Hallett explained to the Banner Graphic that the problem occurred due to a computer issue with the corporation's personal property tax return in 2012.
The $200,000 comes from taxable funds, which would be placed into the corporation's debt service fund, capital projects fund, transportation, bus replacement and pension debt fund.
"We'll still pay all of our bills. We'll still have money," explained Bernhardt. "As in all funds you try to carry a cash balance. We will have money in our funds if we lose this, but it will drop our fund balances in those in quite a bit. We've tried to maintain these cash balances for reasons like this.
"We're not going to go under, but it's going to eat up those cash balances. However, we'll have to work at building those funds back in the future. It's very unfortunate."
The corporation is fortunate in the fact that this mistake will not affect the general fund, which pays out its teachers, aids, secretaries and administrators. If that were the case the corporation would be in danger of having some serious trouble of having to try and make up that money.
As for now, the South Putnam School Corporation will have to sit and wait and hope that the DLGF recognizes the mistake and is able to correct it.