School penalties miscalculated

Posted April 17, 2009, at 9:04 p.m.

AUGUSTA, Maine — A programming error has forced state education officials to recalculate the preliminary subsidy penalty amounts for about 90 school districts that voted not to reorganize.

The Department of Education notified affected school districts on Friday, apologizing for the error which came as some school districts were working on budgets for the coming year. DOE posted revised preliminary subsidy penalty figures on its Web site Friday afternoon.

The affected districts have been assessed higher penalties than were calculated, with increases ranging from a few hundred dollars to as much as $97,000.

The error affected school districts that are regular subsidy receivers that voted not to reorganize as required by state law. These districts were subsequently subject to penalties under the reorganization law.

Districts that did reorganize, districts not required to join with other units, and districts that are minimum receivers were not affected by the computer error.

About 140 districts voted not to reorganize. Of those, about 50 are minimum receivers, leaving 90 or so districts that were affected by the problem.

The computer programming error resulted in the penalties assessed to those districts being lower — in some cases significantly lower — than the department originally had projected, according to Jim Rier, the Education Department’s director of finance and operations.

The department provided school districts with spreadsheets containing the incorrect numbers earlier this week, and almost immediately began receiving calls from those districts questioning the disparity between the new numbers and the projected penalty figures provided to districts last year.

Some calls came from affected districts questioning why their penalties were lower than projected, Rier said. Other calls came from districts that had reorganized and were questioning whether the department had provided high penalty projections at a time when districts were voting on reorganization plans.

“They questioned whether the department had put out high numbers last fall,” Rier said. “That’s not what happened.”

Rier said the problem occurred as the department was preparing subsidy calculations for individual school districts, including calculations for those districts that would be penalized under the law. Two components in particular affect the penalties for regular subsidy receivers, he said: They face an increase in their local required share under the Essential Programs and Services formula, and they receive only half of the EPS system administration costs.

The programming error occurred in figuring the system administration portion of the calculations and actually calculated a lower number, Rier said.

“Consequently, the [statements] sent out … showed penalties much lower than were expected,” he said.

Education department employees spent much of the day Friday correcting the programming error and recalculating the penalties. By late afternoon, the department had posted revised figures on its Web site.

Those recalculated penalties are in line with what the department originally projected, Rier said.

“I don’t think anyone would expect them to be exactly the same,” he said. “But they are very close to what they expected based on what we had projected.”

The figures are still preliminary. The total amount of state subsidy and the related penalties will be based on the final state budget approved by the Legislature in the coming weeks.

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