Taxation department appoints subcommittee to review CCSD, possible fiscal watch

The Nevada Department of Taxation has appointed a subcommittee to monitor the budget and fiscal activities of the Clark County School District following the disclosure of a potential budget deficit last month.

The subcommittee will also make a recommendation on whether the department’s committee on local government finance should place the school district on a fiscal watch, which was also an agenda item on the committee’s Wednesday morning.

If placed on fiscal watch, CCSD would be required to share monthly statements and provide periodic updates to the committee. The district was last placed on watch in 2018 after three years of declines in its ending fund balance — essentially a reserve fund.

In a presentation to the committee, CCSD Interim Chief Financial Officer Dianne Bartholomew argued the district did not meet the requirements to be put on fiscal watch. She said the district plans to use funds from its unassigned ending balance to cover the deficit, which would still leave the reserve with above the recommended four percent of its general fund.

Interim Superintendent Brenda Larsen-Mitchell and Clark County School Board Vice President Irene Bustamante Adams both welcomed the decision to appoint the subcommittee, which they said would help support them.

“I’d like to express my gratitude to the committee members and the governor. Thank you for the technical assistance,” Bustamante Adams said.

The committee had been asked by Gov. Joe Lombardo to make a review of CCSD’s budget following news of a potential deficit.

CCSD has blamed its central budget shortfall, which is currently estimated just under $11 million, on costs related to cybersecurity and litigation.

Larsen-Mitchell said the district had spent $53 million on litigation, which is $23 million more than the $30 million it had budgeted. The district also had spent nearly $15 million on cybersecurity costs for a data breach a year ago.

In addition to the department of taxation, Lombardo has also called on the Legislature to expand an ongoing performance audit of CCSD to include the potential shortfall, examine how the district allocates funding to individual schools and determine how those processes might have broken down.

On Monday, Senate Majority Leader Nicole Cannizzaro and Assembly Speaker Steve Yeager responded to Lombardo in a letter announcing a mid-December Interim Finance Committee’s Subcommittee on Education Accountability. The meeting will conduct a public hearing on the issue.

CCSD plans to present its amended budget in a Dec. 12 board meeting.