School districts may get more financial oversight after Dublin suspensions

Long before the entire school board was suspended, Dublin City Schools was in big financial trouble.

Dozens of Dublin City Schools employees were laid off. The chief financial officer left his post and is being investigated by both state and federal authorities. The district’s financial straits were so dire the state had to give it an “unprecedented” $1.4 million cash advance.

In the midst of its problems, State Superintendent Richard Woods called on lawmakers to strengthen the state’s financial controls over school systems.

“Georgia’s students deserve stability in their learning, and teachers deserve to go to work knowing they will be paid for their efforts,” Woods said in a news release last year. “It’s essential that students, teachers, staff, and families do not bear the costs of financial mismanagement — anywhere in the state, now or in the future.”

A few months later, Woods got his wish when state lawmakers passed House Bill 1164 and Senate Bill 472. Together, they change how the state measures school systems’ financial health and create guardrails for how to handle problems.

The central question is, will this help?

Ideally, the effort to modernize financial controls will “create a system where things don’t fall through the cracks,” said Matt Smith, the director of policy and research at advocacy group the Georgia Partnership for Excellence in Education.

“If anything, (it’s) a silver lining for what we’ve had to go through for Dublin City and other districts that have had high-risk, noncompliant actions,” Smith said. “It’s also an opportunity for us to understand that with multiple agencies working together on this — but maybe not collaborating closely together — there was kind of a Bermuda triangle, if you will, in which certain risk statuses become more acute.”

The suspension of school board members is rare. It most recently happened in Georgia in 2013, when then-Gov. Nathan Deal removed six of the nine members of the DeKalb County Board of Education when the district nearly lost its accreditation, in part for questionable financial decisions.

Dublin City Schools is also at risk of losing its accreditation. During a daylong hearing in August, an attorney for the state outlined two decades of budget deficits in the district. The district’s board — the members of which varied over the years — knew about the deficits, made plans to solve them, then told taxpayers and staff things were fine even when the plans did not work out, the attorney said.

By the time the state got involved, in the fall of 2025, the district owed close to $7 million in unpaid state health benefits, and was projected to have a budget deficit of $13 million by the end of the school year.

The state Board of Education voted unanimously in August to recommend removing all seven Dublin school board members. Gov. Brian Kemp suspended the board. A new slate of school board members were sworn in this month.

The school system expects to ask the state for another cash advance as it tries to rightsize, the Courier Herald reported last week.

Many school districts nationwide have budgets greater than local governments, and some have faced scrutiny for their fiscal management. The Minneapolis school district, for example, lost out on $4.1 million in state and federal special education aid during the 2025-26 school year because of a district accounting mistake, according to published reports. South Carolina’s education department this summer took control of a school district, citing ongoing concerns regarding financial management.

The previous fiscal monitoring system in Georgia relied on audit reports that could lag years behind in some cases, didn’t require communication between state agencies and lacked “teeth.” But the two bills create a financial monitoring system that will more frequently evaluate the overall health of a school system, which could include consideration of things like fund balance, budgeting and declining enrollment, for example.

“(The new system) will give all the agencies and school districts involved a chance to be more proactive versus reactive,” said Sara McLeod, the deputy director of financial audits at the Georgia Department of Audits and Accounts.

The old system of designating school systems as either “moderate risk” or “high risk” will give way to a four-tier risk system, with the highest tier being for districts in a “critical fiscal emergency.” State leaders are still working out the criteria for each of the new risk tiers. The new laws also create an audit committee that will meet six times a year to review risk designations, meaning more check-ins for school systems. And the DOAA will now have the authority to investigate systems where they suspect there are issues.

These impending changes could mean more school systems will be designated high risk — but other districts could see their risk levels go down. They could also mean districts have a quicker way to improve their designation and could come off or on the high risk list more frequently.

Until state leaders develop the criteria to determine risk level, McLeod said, we won’t know for sure.