District Disloses Undisclosed $10 Million Interfund Loan Taken Without Board Approval, Later Retroactively Approved

What happened

The report reveals that in fall 2025 the former CFO authorized a $10 million interfund loan from the health insurance fund to the general fund to cover a September 2025 payroll shortfall, without seeking board approval, reportedly believing state contact was sufficient. The loan remained outstanding into January 2026 when district leadership discovered it, consulted legal counsel, and the board retroactively approved the loan resolution on January 27, 2026. The loan carries a 7% interest rate and must legally be repaid by October 1, 2026; the district separately took a $7.32 million interfund loan from general fund to the SAVE fund to cover debt payments and drew $8 million on a line of credit at 7% interest through Hills Bank.

Why it matters to families

An unauthorized multi-million-dollar interfund loan taken without board approval, followed by additional borrowing to manage cash flow, signals significant weaknesses in financial governance and liquidity risk for the district. The district must repay the $10 million loan by October 1, 2026, and committee members raised concerns about the district's ability to meet this obligation without further borrowing.

The evidence

'In January 2026, the district controller brought to the attention of the superintendent, deputy superintendent, and chief operating officer a need for an interest rate on a $10 million interfund loan taken from the health insurance fund... The former CFO indicated he had been in contact with the state and no approval from the board of education was needed... the interfund loan was retroactively approved by the board on January 27th, 2026... legally must be repaid by October 1st, 2026.'

The source