State: Dublin City Schools could need QBE advances again next year

The Dublin City Schools continues to make progress toward reducing its massive projected deficit, but the district likely will need to borrow against its state funding again next fall to make ends meet, state officials say.

The district appears to be “on track to achieve solvency” in February 2028 – once it makes the final installment on more $6 million in past-due payments to the State Health Benefit Plan – but it must continue to cut expenses, Georgia School Superintendent Richard Woods said in a letter to local school officials. The superintendent also noted the unusually long delay in collecting this year’s property taxes, which pushed the tax deadline back two months. 

“We strongly recommend the district continue to reduce costs where it can and work with local officials to ensure property tax revenues are received in a timely manner, to gain financial independence that is not dependent upon QBE advances,” Woods said.

The system at one point faced a projected deficit of more than $13 million, but officials now believe – after job and spending cuts – the cashflow shortage will be closer to $5 million when the fiscal year ends in June. As of Feb. 13, Woods wrote, the district actually had a $3.4 million surplus as property tax revenue begins to come in.

However, the district was to receive its final monthly allotment of state QBE funding, $1.2 million, this month. It is also expected to receive about $5 million in property taxes in February, the letter explained, but it must rely on taxes for the final months of the school year, and next year state funding alone likely will not be enough to cover both monthly operating expenses and back-payments to the state health plan.

State officials discovered last August that the school district had not paid contributions for employees to the state health for more than a year, along with another $780,512 withheld from employees’ pay but not sent to the Department of Community Health. The school board began a repayment plan this month.

“Looking ahead to FY27, we project Dublin City Schools would need resumed QBE advances beginning in September 2026, until the district begins receiving its next annual cycle of property tax collections,” Woods wrote. “While the district currently has a surplus, its monthly operating expenses will continue to exceed its regular monthly QBE allotment while it completes its current SHBP repayment plan. The current surplus is being used to support ongoing operations and does not eliminate the need for advances prior to the receipt of property tax revenues.”

Dublin school officials responded to Wood’s letter, touting “significant progress in addressing priorities” outlined in its Financial Improvement Plan with the Georgia Department of Education, “completing multiple major action items while advancing several additional initiatives designed to strengthen long-term fiscal stability and operational effectiveness.”  

The letter noted several “tasks” assigned the system by the state that had been completed, with others listed as “in progress.” It also listed “additional tasks” for the school system, which includes reviewing all existing contracts for potential savings. 

The state asks that the district:

• Complete the development of “sustainable financial staffing” within the school district, hire a chief financial officer by March 13, which will allow the new hire to obtain the necessary training “to ensure sound financial management.” The district is currently recruiting a new finance director and new school superintendent.

• Begin confirming personnel costs, salary schedule and supplements for FY27, along with estimated operational costs. Salary schedule information must be provided to GaDOE’s financial consultants in order to project FY27 expenditures, including the effects of the increase in SHBP costs. 

• Review all existing contracts and determine whether they should be resubmitted for a competitive bid to reduce district overhead. 

• Respond promptly to auditor requests and provide necessary documentation to complete the FY24 and FY25 Audits with the Georgia Department of Audits and Accounts. As of last August, the school board had not completed an audit since 2021. It has since finished the 2022 audit, and 2023’s is awaiting “final sign-off,” district officials said.  

• Cooperate with and respond promptly to any requests from Cognia. The accreditation agency is scheduled to be in Dublin next week for a “monitoring review” stemming from the financial crisis.

Dublin Interim Superintendent Marcee Pool said in the district’s response that progress made on the financial front “reflects a unified commitment across the district and community.”

“Our district, board of education and staff continue to be vigilant in accomplishing every necessary step to reach financial solvency — not just for FY 2028, but for the long-term future of Dublin City Schools,” Pool said. “We are grateful for the continued partnership and guidance of the Georgia Department of Education, and we remain fully committed to transparency throughout every phase of this process.”

Some of the “meaningful progress” highlighted by the district included:

• Finalizing an amended FY26 budget for board approval.

• Completing all remaining bank reconciliations.

• Expanding a sustainable financial staffing and training plan to support long-term self-sufficiency.

• Conducting a comprehensive review of district contracts for potential cost savings.

•And preparing personnel cost and operational projections for FY27.