Three Nebraska schools were overpaid in state funds. Others were shorted

The Nebraska Department of Education overpaid three school districts this year because of a miscalculation in the state aid formula called TEEOSA.

The error was within the “poverty allowance” for schools and districts participating in the Community Eligibility Provision of the National School Lunch Program.

Omaha Public Schools put out a message last month about its $30.5 million overpayment. Since then, Grand Island Public Schools officials said they received a $3 million overpayment, and Southern School District in Wymore received roughly $482,000 more than it should have.

Southern Interim superintendent Virginia Moon said she isn’t anticipating having to take drastic action like cutting staff, but it still hurts, especially as a smaller district.

“Although for us, it's a very big number, because our budget isn't very big to start with,” Moon said. “Even though Omaha Public and Grand Island had bigger cuts, it's about the same amount of their budget as it is of our budget, percentage-wise.”

Moon said the district’s future state aid will be less due to the cut, changes in calculations and higher property valuations.

In a statement last month, NDE Commissioner Brian Maher said the department has worked to correct the issue that caused the overpayments.

"This error also means that many other districts that rely on equalization aid from the state received less than they should have," Maher said.

However, even school districts that were shorted may not see an increase in state aid next school year.

Liz Standish, associate superintendent for business affairs for Lincoln Public Schools, said although LPS was shorted $8.9 million in state aid for this school year, the changes in property valuations could still mean an overall decrease.

“We could have flat state aid, we could have declining state aid or we could have growing state aid going into next year,” Standish said. “We won't have those numbers until March of 2026.”

Standish said over the last five years, LPS has received anywhere from a $32 million drop in state aid to a $4 million increase, mostly due to property valuations.

“Keep in mind that Lancaster County had a year in there where we had 22.5% increase in property valuations on average across the county, so that creates significant fluctuations in what happens for state aid,” Standish said.

The State Board of Education is planning to hear more information about the TEEOSA miscalculation during its meeting Friday, according to board member Elizabeth Tegtmeier.

By way of full disclosure, Brian Maher is a commissioner on Nebraska Public Media's governing board, the Nebraska Educational Telecommunications Commission.