A potential $10 million gap looms for Lake County schools after a state audit questions its use of impact fee funds.

Audit spurs warning on district’s use of impact fee funds

The Lake County school district could be on the hook for $10.3 million if the state determines that impact fees collected to offset costs associated with growth were improperly used to pay off debt.

A 15-page report released last week by the Florida auditor general’s office questioned whether impact fees the district collected in 2016-17 that went toward past debt rather than new school construction and improvements was permissible through county ordinances.

The challenge to the district, which is defending its use of the impact fees, comes at a tough time for the cashstrapped school system as the state shifts money toward charter schools. An adverse ruling from the state Department of Education could require the district to come up with another $10.3 million to backfill the money gap for future capital projects.

“We just dropped from $32 million to $19 million in debt. … Everybody is scrambling to see what they want to do with these leftover dollars,” School Board member Bill Mathias said. “If they [the state] determine otherwise, it’s not going to be good.”

Compounding the problem is a need to fund a new school in south Lake County near the booming Four Corners community and a recent realization that some experienced teachers in the district are being paid thousands less than teachers new to the job. District officials are struggling to figure out how to resolve the pay inequity issue.

“Why not just pay the $12.7 million it would take to equalize pay and make this right?” asked Lake Superintendent Diane Kornegay in an opinion piece published last month in the Orlando Sentinel. “We don’t have the money.”

With an additional $10.3 million hanging in the balance, the school district could find itself with even less money to spend on its students.

The state is required to audit school districts once every three years.

The purpose of the audit is to evaluate weaknesses on “internal controls,” such as up-