Bipartisan group of lawmakers want Appo audited for 'troubling financial developments' including tax hike

The requested audit into Appo follows a board approval of a 10% tax increase. (Photo by Andrey Popov/Adobe Stock)

Seven Delaware legislators – consisting of both Republicans and Democrats – are calling for a forensic audit of the Appoquinimink School District.

The letter, addressed to State Auditor Lydia York, claims the request is “in response to recent troubling financial developments,” in Appo, which is the second largest school district in the First State, with 21 schools serving more than 13,000 students.

The lawmakers who requested the audit are Sen. Stephanie Hansen, D-Middletown; Rep. Kevin Hensley, R-Townsend; Kyra Hoffner, D-Leipsic; Rep. Sherae’a “Rae” Moore, D-Middletown; Rep. Eric Morrison, D-Glasgow; Sen. Nicole Poore, D-New Castle; and House Minority Whip Jeff Spiegelman, R-Clayton.

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On July 8, the district’s Board of Education approved a 10% increase in the local school tax rate after telling the public that there wouldn’t be a tax hike this year.

“The justification provided for this sudden reversal was reportedly the discovery of a major accounting error that has placed the district in unexpected financial
jeopardy,” the lawmakers’ letter points out.

Urgency surrounding the situation directly relates to the large and growing size of Appo and the resources it provides.

If the legislators get their wish, a forensic audit would:

Determine the cause and full extent of the accounting error
Evaluate whether fraud, mismanagement, or negligence contributed to the district’s current financial condition
Assess whether the district has been in compliance with state laws, internal controls, and proper accounting procedures
Identify any systemic issues that could pose ongoing risks to fiscal integrity
An inquiry into reported inequities by New Castle County as they relate to the county’s 2024 tax collection process

The last of the points, relating to inequities, ties back to an April 2025 comment from Karen Felix, a member of the Appoquinimink School Board Finance Committee, where she stated that “there were major inequities in the 2024 taxing process, where some residence/commercial properties were taxed, and others were not.”

Lawmakers are understanding that new businesses and new residents of the district, after July 1, 2024 (this past fiscal year), were not taxed.

“As a result, tax revenue from those entities were not collected,” the letter stated. “An explanation of the county’s oversight is, therefore, also requested.”

Taxpayers, parents, and educators deserve full transparency and accountability from district leadership, the letter asserts.

“This audit would provide critical information to inform future oversight, budgetary planning, and legislative decision-making,” it read.

Appo Superintendent Matt Burrows said the district respects and understands the efforts of local lawmakers at the state and county levels requesting an audit by the Delaware State Auditor.

“We are currently conducting a thorough examination of our financial situation to take corrective action to ensure this never happens again,” he said. “This review will be conducted by individuals with school finance experience outside of our district.”

Moving forward, he said, the district is committed to a number of processes to ensure this never happens again, including:

Onboarding a new finance director
Adding additional members with school finance experience to the oversight committee and providing ongoing training
Additional financial reporting that will be shared with the oversight committee and School Board

“We are also committed to providing ongoing, detailed information to our community as these measures take place,” he said. “n addition to these efforts, the district has also outlined $2.5 million in spending reduction for the next fiscal year. We are focused on making reductions that will have the least impact on our staff and students, aligned with our core value of always doing what’s best for every student.”

The key areas where reductions will be implemented, Burrows said, are:

Department budgets
School building budgets
Staff reassignments
Program/initiative/position reductions

Initial statement from Superintendent Matt Burrows to families and new tax rates

“Dear ASD Families,

As many are aware, at the July 8 School Board Meeting, the School Board voted to raise the operating tax rate by approximately 10%. Given the ongoing discussion throughout the community, we wanted to share this communication to ensure everyone has accurate information.

Each year, the Appoquinimink School Board holds a board workshop in June and votes at its regularly scheduled July School Board meeting on the tax rate (also referred to as the tax warrant) for the following school year. The new tax rate must be shared with New Castle County by the second Thursday in July each year by law.

As a reminder, there are four components to the tax rate:

Operating Tax: general operations
Debt Service Tax: funds new buildings and major renovations
Tuition Tax: funds special education and other programs as allowed by law
Match Tax: offered local match for specific state programs as allowed by law

At the June Board Workshop and July Board Meeting, information was shared regarding our current financial position. As was shared at both meetings, the amount of money we’ve been anticipating in our “carryover balance” (think of this as similar to your personal savings account) is lower than we were projecting for this year.

I want to share more information about the timeline of events. In May, shortly after our first School Board Workshop regarding the tax rate – the then-finance director first shared concerns about forecasted or projected expenditures. In June – after the former finance director resigned, the district brought in subject matter experts. Those experts made the district aware of the full impact of the budgeting errors – including underestimated employee costs. At this point, the district became aware the financial position report was missing one payroll cycle, which greatly impacted the predicted carryover balance. In addition, it was discovered summer school expenses were incorrectly assigned to a federal account rather than a district account. Alone, these two errors meant that the carryover would be $3.2 million less. All told, when the corrections were made, this resulted in an estimated carryover of only $3.1 million, which is less than the projected carryover and the $4.2 million required by the State. This all was discovered just before the June Board Workshop. To be clear, this was a forecasting or projecting issue of total budget expenditures.

As a district, we are currently conducting a thorough examination of our financial situation to take corrective action to ensure this never happens again. This review will be conducted by individuals with school finance experience outside of our district.

We have always prided ourselves on our fiscal stewardship, particularly as a district that brings in far less local tax revenue based on our largely residential community. Appoquinimink also has the lowest taxes, the lowest tax assessment base, the lowest operational cost per student, the lowest administrative headcount, and the lowest teacher pay in New Castle County. Our district has always been incredibly careful with spending. Our district receives less revenue than all other districts in our county, yet we have the third highest number of students. On a per student basis, Appoquinimink is spending thousands of dollars less than other nearby districts.

In addition to the errors identified regarding expenditures, we also know three key components significantly impacted budget projections this year, including:

rising utility costs
increasing special education population
national teacher shortage and associated costs for recruiting and retaining staff

We have identified $2.5 million in spending reduction for the next fiscal year. We are focused on making reductions that will have the least impact on our staff and students, aligned with our core value of always doing what’s best for every student.

The key areas where reductions will be implemented are:

Department budgets
School building budgets
Staff reassignments
Program/initiative/position reductions

Moving forward, we are committed to a number of processes to ensure this never happens again, including:

onboarding a new finance director
adding additional members with school finance experience to the oversight committee and providing ongoing training
additional financial reporting that will be shared with the oversight committee and School Board

We are also committed to providing ongoing, detailed information to our community as these measures take place.

After much discussion, a combination of cuts and a one-time rate increase was the path chosen by the School Board. Understandably, some community members do not agree with this decision; however, even after this one-time increase, the district’s operational tax rate will remain lower than all other nearby districts, and Appoquinimink will continue to spend less money per student than its peers. This one-time increase is allowable by law only during reassessment. Please know, this measure was used as a last resort to avoid cuts that would greatly impact our students and staff.

Below are the current new tax rates for our district, broken down by category:

Operating Tax: $0.3541
Debt Service Tax: $0.0750
Tuition Tax: $0.1743
Match Tax: $0.0341
Total per $100 assessed value: $0.6375

School Board Meetings in our district take place the second Tuesday of each month. We diligently share meeting reminders on our website, social media, and newsletters. All families and community members are welcome to attend in-person or watch the livestream on our Appoquinimink YouTube channel. In addition to the regularly scheduled School Board Meetings, School Board Workshops also take place periodically throughout the year. These meetings are also shared on our website, social media, and newsletters. Finally, all of our School Board members are available by email to discuss matters between meetings.

Please know that we are committed to our path forward. As a district, we continue to focus on cost reduction measures and will continue to conduct a thorough examination regarding the situation.

Respectfully,

Matt Burrows”

This is a developing story. Check back for updates.

Jarek Rutz

Raised in Doylestown, Pennsylvania, Jarek earned a B.A. in journalism and a B.A. in political science from Temple University in 2021. After running CNN’s Michael Smerconish’s YouTube channel, Jarek became a reporter for the Bucks County Herald before joining Delaware LIVE News.

Jarek can be reached by email at jarek@dimgrey-peafowl-504880.hostingersite.com or by phone at (215) 450-9982. Follow him on Twitter @jarekrutz and on LinkedIn.