Moses Lake School District Faces Scrutiny After State Audit Reveals Financial and Compliance Issues

Moses Lake, WA – A recent accountability audit of the Moses Lake School District (MLSD) has revealed significant financial and compliance concerns, including budget overspending, a lack of required approvals for a 2024 levy and inadequate internal controls. The Washington State Auditor’s Office presented its findings to the school board on March 20, 2026, highlighting issues spanning 2022-2024.

Budget Non-Compliance and Declining Financial Condition

The audit found that the district’s financial health deteriorated considerably between 2022 and 2024. By the complete of the 2023-24 fiscal year, the district had only 27 days of operating expenditures available, falling short of the 60-day minimum considered a reasonable benchmark by auditors [Columbia Basin Herald]. The district exceeded its legally adopted general fund budgets by $4.46 million in 2022-23 and $4.09 million in 2023-24, despite internal warnings about overspending [Columbia Basin Herald].

Contributing factors included delayed and inaccurate budget reports, staff turnover, and incomplete financial monitoring. District leaders have stated they have overhauled financial reporting, expanded oversight, and restored the general fund balance to healthier levels as of August 2025 [Columbia Basin Herald].

Levy Approval Process Flawed

The audit likewise determined that the district placed enrichment levies on the ballot in February and April 2024 without first obtaining the necessary pre-ballot approval from the Office of Superintendent of Public Instruction (OSPI). State law mandates OSPI approval of a district’s levy expenditure plan before a measure is presented to voters [Washington State Auditor’s Office]. The lapse in procedure was attributed to administrative turnover. OSPI granted retroactive approval in June 2025 [Columbia Basin Herald]. The district has since created a formal levy-submission checklist and assigned clear responsibility for compliance.

Weaknesses in Purchasing and Expenditure Controls

Auditors identified significant weaknesses in the district’s purchasing and expenditure controls. In 2023 and 2024, the district made $693,000 and $751,000 in purchases using credit cards, respectively, and spent $695,000 and $652,000 on fuel cards during the same periods [Columbia Basin Herald]. A $1.6 million furniture purchase made through a cooperative purchasing agreement lacked documentation verifying legal compliance and accurate pricing.

A review of 135 transactions totaling approximately $200,000 revealed deficiencies, including 78 transactions lacking detailed receipts or purchase orders, 16 with no supporting documentation, seven lacking proof of receipt, and several approved after the purchase date [Columbia Basin Herald]. Fuel usage also lacked adequate oversight, with no tracking of authorized users, reconciliation of tank levels, or monitoring of usage patterns.

The district has responded by updating procurement procedures, expanding staff training, creating centralized recordkeeping, discontinuing open purchase orders, and increasing board review of expenditures.

Additional Concerns Raised in Management Letter

Beyond the formal findings, auditors issued a management letter outlining additional concerns:

• Payroll and Leave Monitoring: A former technology director misrepresented jury duty leave, resulting in a $2,056 misappropriation, and some employees exceeded bereavement leave limits.
• Supplemental Contracts and Coaching Leave: Some supplemental contracts lacked required documentation, and employees traveled for sports events without proper coaching contracts.
• Enrollment Reporting: Initial difficulties providing bell schedules for instructional minute verification were resolved using bus schedules.
• Associated Student Body Funds: $24,464 was owed to the ASB fund due to incorrect recording of Future Farmers of America revenues and expenditures.
• Cash Handling: Infrequent bank deposits (only five over two years) and outdated authorized user lists were identified.
• Asset Tracking: Several IT assets were missing, untagged, or misplaced, and inventory controls were lacking.

The district has taken corrective actions to address each of these concerns, including policy revisions, new tracking procedures, standardized templates, and updated access controls.

Looking Ahead

Board Vice President Paul Hill stated that the issues stemmed from practices under prior administrations and that current board members and administrators were not responsible [Columbia Basin Herald]. The district emphasized its commitment to continuous improvement and transparency. The next audit is scheduled to begin in April [Moses Lake School District].