A projected $700,000 budget shortfall in a Minnesota school district sparked an official investigation after several financial irregularities were discovered.
The budget deficit results from various factors, such as rising costs, payroll discrepancies, and a series of unpaid bills. Superintendent Jim Mention of the Bird Island-Olivia-Lake Lillian (BOLD) school district first raised the situation last month during a board meeting.
Minnesota School District's Budget Shortfall
The financial irregularities mentioned also include a series of bills that had not yet been paid. One of these is a $90,000 charge for landscaping services that were finished several years ago.
The superintendent said, "We started to find out about these late last summer when concerns came to light about our former business manager's handling of money." Mention did not mention the name of the business manager he was referring to during the board meeting.
However, law enforcement authorities in Olivia are now investigating details about a 48-year-old woman who was said to have worked at BOLD from May 1, 2021, to Sept. 5, 2024. According to the Star Tribune, she is believed to have used school funds to buy personal items.
An official search warrant also described the individual in question as being connected to a "serious embezzlement/theft allegation." It added that roughly $11,528 worth of questionable purchases were found on the woman's school-issued credit card.
These included expenses at Buffalo Wild Wings, Walmart, and Target, auto loan payments, and energy bills. Olivia police chief Jason Krumheuer confirmed that his department is investigating the financial irregularities brought to its attention by the BOLD School District.
Drop in State Surplus
The situation comes as the state of Minnesota experiences a worsening budget outlook in the near and long term. The Minnesota Legislature reported that the February 2025 Budget and Economic Forecast revealed this.
The state surplus for the 2026-27 fiscal biennium, which was predicted to be around $616 million in November of last year, has now dropped to $456 million. This means that the Legislature and Gov. Tim Walz have fewer funds to use.
Bipartisan lawmakers acknowledged that cuts and changes to curb spending growth projected for the future will be needed. Democratic officials have blamed President Donald Trump's first weeks in office for the situation.
They argued that the Republican leader's tariffs caused the spending freezes and potential cuts to Medicaid. On the other hand, right-wing lawmakers, as per Axios, said DFL officials are responsible for spending down a $17 billion surplus in the budget.
