The Iowa City Community School District board of directors is questioning leadership after the district took out a $10 million loan without board approval.
The district estimates they’ll need to trim $5-6 million from the 2027 fiscal year budget, due by the end of April.
School board members questioned administrative leadership during a work session on Tuesday, Feb. 17. Board member Jayne Finch said if they’d been notified of the loan, it would have “triggered red flags” about the “financial health of our district.”
“Board approval is different than board notification, even if the board didn’t need to approve it, why wouldn’t you notify the board,” Finch said. “…If my husband took a $10,000 loan with my name on it and didn’t tell me for six months, we would be divorced. I just can’t believe that someone would take out a $10 million loan with the board president’s name on it and not even bother to tell the board.”
The ICCSD says its “expenses outpaced our projections.”
The loan, retroactively approved by the board of directors in January, was drawn from the district’s health insurance fund to cover an expected general fund deficit, which pays staff salaries. The loan was approved by ICCSD’s former chief financial officer, Adam Kurth, who left in November 2025.
Superintendent Matt Degner said the loan was a “normal course of action,” and “a temporary gap measure,” that did not require board approval.
But, Iowa’s statutory authority for funds says that board approval was needed.
All loans between funds within a fiscal year must be accomplished through official board action and may not be accomplished until the board, by resolution, authorizes the loan,” the policy says.
Iowa City CSD’s December financial report indicates that the loan was repaid incorrectly due to incomplete and inaccurate data. Degner said he failed to ensure “the board processes (were) followed,” noting that the loan signals an “overall structural problem.”
The loan interest rate is roughly four percent, or about $394,000, according to the district office.
ICCSD will address ‘financial missteps’ ahead of 2027 fiscal year
Board members are asking for better transparency from district leadership. Board member Lisa Williams is suggesting that they receive a monthly budget report along with actual expenditures and expenses. Board member Mitch Lingo said it’s especially important amid ongoing legislative debates over school choice and funding.
“We’re having this happen at a time where parents are doing their school choice and whether they’re going to use our school district,” board director Mitch Lingo said. “If we cannot provide the trust and transparency as a school district and as a board for them to feel confident in using our schools, we’re not in good shape.”
The board will review financial oversight policies and procedures during its next meeting on Tuesday, Feb. 24,.
The ICCSD is working with lenders to secure a $3 to $5 million short-term loan to cover expenses until it receives property tax payments in April.
The district will “make spending adjustments” in areas such as travel, transportation, overtime, substitutes, professional development days, and supply purchases. While focusing on completing and catching up on “three years of audits in 18 months.”
Board documents show that the district had an average payroll increase of nine percent during the most recent academic year, which was about $15.7 million more in salary and benefit costs than the year prior. The district spends about 86 percent of its general fund on salaries and benefits.
Jessica Rish is an entertainment, dining and education reporter for the Iowa City Press-Citizen. She can be reached at JRish@press-citizen.com or on X, formerly known as Twitter, at @rishjessica_
This article originally appeared on Iowa City Press-Citizen: Iowa City CSD’s $10M loan sparks leadership questions, budget concerns
Reporting by Jessica Rish, Iowa City Press-Citizen / Iowa City Press-Citizen
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