Lawmakers ask state for ‘special examination’ of Dublin school finances

Local lawmakers have asked the Georgia Department of Audits & Accounts to conduct a “special examination” into the Dublin City Schools’ “alarming financial situation.”

The school system has come under scrutiny after state officials learned last month that the district owed almost $5 million in overdue payments for employees’ State Health Benefit Plan. After looking into the system’s finances, state education officials now project the system will face a $13.4 million cash flow shortage by the end of the current fiscal year.

“These findings suggest a trend in fiscal distress that, if left unaddressed, could result in insolvency and jeopardize the educational services provided to the children currently enrolled in Dublin City Schools,” state Rep. Matt Hatchett and Sen. Larry Walker, who both represent the Dublin area, said in a letter sent Monday to State Auditor of Georgia Greg Griffin.

“The situation also raises questions about the accuracy of financial reporting, payroll accounting and the district’s ability to comply with state-mandated fiscal guidelines.”

The lawmakers alluded to state law that allows members of the General Assembly to request the state auditor “to conduct special examinations into the management of public funds and the fiscal practices of public entities.”

Their request included the letter sent Friday by state School Superintendent Richard Woods to Dublin Superintendent Fred Williams stating the district is “on a direct path to insolvency and financial crisis.”

“That letter details the district’s alarming financial position,” Hatchett and Walker wrote, going on to include these key points:

• The system’s outstanding liability of $6,684,963.81 owed to the State Health Benefits Plan.

• Projected cashflow shortages of $11,842,817.56 by Dec. 31, 2025, and $13,418,076.12 by June 30, 2026.

• A deficit approaching the district’s entire annual state Quality Basic Education allotment of approximately $16 million.

• Failure to provide an adequate deficit reduction plan or balanced budget pathway for FY27.

The letter from the legislators’ also highlighted reasons a special examination is necessary: • Identify the root causes of Dublin City Schools’ financial crisis.

• Assess the district’s fiscal controls, reporting accuracy, and compliance with state requirements.

• Recommend corrective measures to restore and safeguard state and local taxpayer funds.

“Given the severity of the issues and the potential statewide implications for fiscal oversight of public schools, we respectfully urge you to initiate this examination promptly,” Hatchett and Walker wrote.

Copies of the lawmakers’ letter were sent to several high-ranking state officials, included Gov. Brian Kemp, Attorney General Chris Carr and Woods.

Woods first contacted Dublin school officials in mid-August about “operational deficiencies” in the system’s finances that included the district not paying employer contributions to the state health plan for the entirety of fiscal year 2025. Also, the schools had deducted employee contributions from workers’ paychecks but withheld payment for months, since March, until wiring  $780,512 to the state Department of Community Health after an Aug. 15 meeting with the state. Woods also noted in two letters to local school officials that the Dublin school district had not completed an audit since 2021.

Williams and school board members have said they were surprised by those findings, but so far have offered no explanation for the district’s financial situation. So far, fallout from the findings has led former finance director Chad McDaniel to resign and the schools to impose a hiring freeze.

The system’s financial woes come after a 25-percent tax increase last fall that should have generated at least $3 million more in revenue over budget. The school board rolled back its millage rate, but not enough to offset the net growth in the tax digest following a long overdue property revaluation.

Monthly financial reports obtained by The Courier Herald last week show that despite the influx of new tax revenue, the system was mired in a deficit the entire fiscal year 2025. The reports show the district began the fiscal year with a $1.8 million deficit and never got out of the red, falling as deep in the hole as $7 million.

Because the Dublin City Schools’ past financial issues – the system struggled with a huge deficit for almost a decade – the school board is required to file the monthly financial reports with the state. The reports must be signed by all board members in attendance when approved.

The school board scheduled a called meeting for Tuesday night, with “financial investigation” on the agenda.