The financial repercussions of Merrimack Valley’s $2 million over-expenditure will likely spill into a second school year, according to Superintendent Randy Wormald.

After disclosing the oversight in January, district administrators had said they would attempt to pay it off with excess money from this year’s budget. Wormald said Monday that now appears unlikely – at least in full.

“It does look like we’ll be hopefully finishing in the black, but I don’t think that we’re going to be able to absorb as much as we would have liked,” he said in an interview following a school board meeting.

After tapping into trust funds last fall to cover about half of the over-expenditure, the district still had $1 million outstanding. Wormald said it won’t be clear how much money – if any – will be left over to chip away at that balance. Though the fiscal year ends June 30, it will likely take some time after that before all bills are paid and a full picture of this year’s total spending comes into focus.

From an accounting perspective, any remaining debts will shift into next year, according to Wormald.

That could compound an already challenging fiscal environment for the district, after voters rejected the proposed budget in March.

The $49.7 million approved for next year was a 4% reduction from the $51.7 million the district had asked residents to spend. The vote forced the district to eliminate 21 positions and lay off up to three employees. (Next year’s approved budget is $1.4 million more than this year’s $48.3 million.)

The financial missteps that led the district to unknowingly overspend during the 2023-24 school year were longstanding, Wormald previously said.

Over a lengthy period of time preceding last year, the district – motivated partly by a desire to keep budgets low – failed to maintain the financial safeguards that are designed to withstand fluctuations in a district’s expenses, according to Wormald. Then, when perennially unpredictable special education tuition and transportation expenses both exceeded projections by hundreds of thousands of dollars, the district had too little left in reserve.

“These factors combined left the district financially vulnerable and unable to absorb unexpected costs,” Wormald said.

To get back on solid financial footing, district leaders have advocated for restoring trust funds and passing budgets that would build an unassigned fund balance. However, voters balked at the increased sticker price during the annual meeting in March. As a result, the district could head into next year with some of the same financial vulnerabilities that caused the over-expenditure in the first place.

As it deals with the financial challenges, the district is in the midst of a major leadership transition.

Wormald, who became superintendent in July 2023, announced he will retire at the end of next school year. Current assistant superintendent Catherine Masterson will replace Wormald. Current high school principal Sam York will become the school administrative unit’s business administrator this July, replacing Hilary Denoncourt, who resigned in February for “personal reasons.”

Previous Monitor reporting was used in this story.