SEATTLE — The Issaquah School District improperly paid for certain capital projects using bonds that voters had approved for other purposes, the school system announced Friday.
Superintendent Heather Tow-Yick said in a news release the district had accounted for all the bond funds, and they were used on other expenses approved by the School Board. In an interview Saturday she declined to release additional details.
“We still need to determine the scope and the scale” of the problem, Tow-Yick said. “We know that money is not missing. That is an important statement for our community. It was all used on capital projects that were approved over time.”
In 2016, voters approved a $533.5 million bond issuance for a list of specific capital improvements, including construction of a new high school, a middle school and two elementary schools. The district serves roughly 18,500 students.
Ten of the 2016 bond projects have been completed and two are still in the works, according to the district website.
But some of those bond funds were used on capital projects the district declined to specify. Tow-Yick said that “to our knowledge” none of the 2016 proceeds were used for operating expenses.
Officials in the Eastside district made the discovery within the past two months while conducting an internal review of capital expenditures, Tow-Yick said. In preparation for an annual state audit, she added, district officials notified the state auditor that Issaquah was not in compliance with official bond documents.
The district plans to put additional safeguards in place “to better track project funding and ensure this does not happen again,” Tow-Yick said in the news release. She added that the district would be looking for potential guidance from the state auditor.
The disclosure comes as Issaquah and other Washington school districts face a worsening financial picture amid declining enrollment. In October the ratings service Moody’s changed its outlook for Issaquah School District from stable to negative.
