State Computer Error Will Cost GCSD $98,000

A miscalculation by the Iowa Department of Revenue will cost the Glenwood Community School District $98,420 in revenue over the next 12 months. The state is blaming a computer error in a program tasked with collecting sales taxes as part of its Secure an Advanced Vision for Education (SAVE) program – the state’s one-cent sales tax fund used for school infrastructure projects – during its final tabulations of payments last year. As a result, the state misallocated more than $9 million in sales taxes from the fiscal year that ended June 30. Many school districts in metro areas were shorted revenue, while many rural districts got extra dollars through the SAVE fund. The error resulted in most of Iowa’s 346 school districts receiving the wrong amount of SAVE revenue. Glenwood was among 234 public school districts that will have to pay back funds. Glenwood’s $98,420 tab is the highest among southwest Iowa school districts. The same error resulted in East Mills owing $27,476 and Fremont-Mills $22,065.Glenwood Community School District Superintendent Devin Embray said the district was informed of the error in mid-January. He was dismayed to hear the news of the miscalculation but doesn’t see the $98,420 as having a major impact on the district.“Since I’ve been here, we don’t spend money we don’t have,” Embray said. “So basically, it’s not going to affect us. We always have one year of collection of funds in the bank and we draw down from that. We’re always a year out. For us, it was ‘So we’re not going to get this?’ So we drop our bottom line by $100,000 but it doesn’t effect our spending for this year.”The district could see an impact in that loss of revenue next year, Embray said, but knowing it’s not available now can only help down the road.“We know we’re not going to get it so it balances out,” he said. “We have 12 months to plan for it.”To recoup its money, the state will reduce its SAVE fund payments to Glenwood by about $8,300 a month over the next year. Embray doesn’t see the payback schedule having an impact on any district programs.“Even if it did show an impact, we’d cut back on some of our summer wish list items and we’d just have to scale those back,” he said. Glenwood was unaware of the extra money in its SAVE fund until accounting firm Piper Jaffrey, a financial services company that advises Iowa school boards on bond issues, sent out an email Jan. 2 warning of a possible error in SAVE payments.“They said they didn’t know whether they were right or wrong but they thought they were right (on the miscalculation) and that districts would have to pay it back so don’t go crazy spending it,” Embray said. “So we waited three weeks, and the Department of Revenue came back with the news.”Embray said it’s hard to get too worked up over the error or how the district was informed of the misallocation.“The emotional selfish side of me says, ‘Goshdangit, that should have never happened,’” he said. “But I also know everyone makes mistakes. And making a mistake and taking it all back in one lump payment would have been worse. They made a mistake and admitted to it and giving us 12 months to pay it back is a good thing. It was a mistake made over a 12-month period of time so it’s fair. “The bottom line is this money wasn’t ours to begin with. If it was ours and it was being taken from us, I’d make much more of a stink of it.”The news isn’t bad for all of Iowa’s public school districts. The Council Bluffs School District and the Lewis Central Community School District are among the 112 Iowa school districts that will be receiving a refund from the state. According to data provided by the Iowa Department of Revenue, Council Bluffs will be getting an additional $292,558 and Lewis Central $83,912.Urban areas appear to be the biggest beneficiaries of the mistake; most urban school districts are getting money back while rural districts will have to pay back money. The Des Moines Public Schools will receive the largest refund at just over $1 million while Marshalltown has the largest amount owed at $262,277.The SAVE money means $1 million annually to Glenwood. It is and has been used extensively in the district, Embray said.“We use it for technology, we use for physical plant and equipment projects, facilities,” he said. “We keep our buildings up to speed and on a five-year plan. Capital projects are out of that. The new gym project is out of that fund. We don’t have to use property tax for that. The fact we don’t have to go to a bond and have people’s property taxes go up in order to improve our facilities and maintain our technology is huge. I’d hate to see that go away.”