MARICOPA COUNTY, Ariz. — Maricopa County’s top money manager is sounding the alarm on how the county has handled its finances in the past.
According to recently elected Treasurer John M. Allen, the previous treasurer made a nearly $16 million error in the investment portfolio that generates interest earnings for Maricopa County, school districts and other taxing districts.
The error led the Treasurer’s Office to over-distribute money to those districts during the past three years, Allen said.
Now, according to state law, the county has to immediately make up the difference.
“It’s not significant as far as the overall size of these budgets but anytime a government entity makes a $15 million mistake, that is a big deal to us,” Allen said.
The $15.8 million error means that the planned third quarter distribution of $18.7 million will be reduced to $2.9 million. The difference means $5.5 million less for Maricopa County in its third quarter disbursement.
The school district with the biggest loss as a result of the financial correction is the Phoenix Union High School District. It will receive $894,000 less. Mesa Public Schools will receive $726,000 less.
“It’s not money schools budget for, but it’s a significant mistake,” Allen said.
According to Allen, the third quarter adjustments should not impact schools’ annual budgets. 12 News reached out to the PUHSD but did not receive a response as of Thursday afternoon.
Allen blames former Treasurer Royce Flora and Deputy Treasurer Russell Pearce for poor management practices that led to the problem.
“It is clear that overstating income earned from interest reflected a narrative that served their political purposes,” Allen said in a statement.
12 News was unable to contact Flora or Pearce for comment.
Allen says that since he’s taken office, he made a new hire, adjusted procedures and improved software to make sure this kind of mistake doesn’t happen again.
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