A rural Northeast Oklahoma school district is scrambling to address a nearly half-million-dollar budget shortfall.
After dozens of students left Caney Valley Public Schools in 2024 and 2025, the district's share of state and federal funding decreased, but administrators failed to account for the change in the district's budget, spending thousands on teachers they couldn't afford.
Overencumbered funds went unnoticed until the end of April 2026, when Caney Valley's financial advisor, Jeff Lay, notified district Superintendent Steven Cantrell that the financial records were inconsistent. By that time, it was already too late in the academic year to implement a reduction in force, since district employees were owed paychecks for the hours they had worked.
The amount of money that a public school district receives is calculated by the federal government and the State Department of Education. Funding determinations are based on a wide range of factors, but the number of enrolled students and their specific needs make up a large part of the equation.
Student enrollment in the Washington County school district has decreased marginally each year since 2022, but last October there were 70 fewer students than the year before.
Cantrell said some students left because Caney Valley can't compete with larger, better-resourced districts in some areas. Other students, he said, may have left because the district implemented a new policy requiring its remote learners to come to campus for in-person proctoring during class exams.
In recent years, lawmakers have made it easier for students to move schools as they choose, creating tax credits for students enrolled in private schools and strengthening the state's open transfer policy, which allows some students to transfer to public schools outside their district.
Still, Cantrell and district staff were notified they would receive less in appropriations when auditors submitted the district's estimation of needs to the state on September 9, 2025. No one at Caney Valley adjusted the district budget to account for the loss of students.
In school board meetings, emails and interviews, Cantrell has accepted full responsibility for the mistake.
"We thought we had more money than we did … and that falls on me," Cantrell said. "I'm not going to let other people suffer for something that I should have caught."
Cantrell said he plans to use rental properties he inherited from his father as collateral for a personal loan to cover the $500,000 the district overspent.
"God has blessed me," Cantrell said. "I can do this and ensure that no one else has to suffer."
Staff salaries exceed the budget
Operating on an incorrect budget, Cantrell spent money he thought the district had on employee salaries. Last year, he hired additional support for students with special needs and heeded principals' requests to reinstate the district's art program.
"Nothing was done with the funding other than to try to help kids," Cantrell said. "That's the number one thing that I'd like for the community to know. We hired staff in an effort to try to help kids."
Cantrell has been Caney Valley's superintendent for eight years. He grew up about half a mile outside of district limits in Collinsville and jumped at the opportunity to come home. He said he was eager to help lead such a tight-knit community.
That's exactly how Johnny Joe Morgan, a local cattle rancher, describes the school district.
"As a kid, as a student, I wasn't just a number," he said. "People really were [invested] in getting me a good education."
Morgan's grandchildren are the fifth generation in his family to attend Caney Valley schools, and he hopes the tradition doesn't stop there.
Morgan and other community members were alarmed to hear the district was in debt and confused about how the shortfall came to be. He spoke up during a school board meeting on June 1 on behalf of concerned citizens.
Cantrell responded to Morgan's questions in a written statement on June 5. Cantrell said he wanted to quell rumors about a misuse of funds. He said the budget shortfall isn't because money disappeared — it's because the district spent money it didn't have.
"There was nothing nefarious or malicious on my part," Cantrell wrote in his responses. "I should have enacted a Reduction in Force in January to alleviate the possibility of a shortfall."
Caney Valley School Board President Ron Pruitt said most of the district's money goes toward paying teachers and employees; there isn't a good way to cut spending besides adjusting staffing levels.
"You can't save enough gasoline or electricity in the gymnasium or in the school classrooms to make up just 10% of a budget when 90% of it is salaries and benefits," he said.
Attempting to close the gap
Caney Valley Public Schools hasn't yet overspent its appropriations but is on track to do so at the end of June, according to district auditors at Patten & Odom.
"If you move forward with all of the expenses that you have encumbered, you will overspend your appropriations," Courtney Odom told the school board on May 11.
If the district overspends, she said, board members and other district officials could be held personally liable.
District staff reviewed upcoming purchase orders to determine whether any encumbered expenses could be avoided. The nearly half-million difference between available funds and projected spending was reduced to $390,248.30, partially by moving some expenses from the school budget to the district's child nutrition and building funds, Pruitt and Cantrell said.
The remaining encumbered funds are for necessary expenditures and staff salaries, according to the two officials. No additional purchase agreements will be entered before the situation is rectified, Cantrell said.
To help reduce the shortfall, school board members also approved a motion to submit a Form 307 to the state. It's an official financial document used by public school districts to request supplemental appropriations.
"Most of the time, that gives a district enough appropriations to continue and move forward," Odom said. "That is not going to be the case for your district."
Misinformation about the financial turmoil has quickly spread, prompting angry reactions from community members frustrated with district officials.
Before the shortfall was discovered, the district had also applied for a $500,000 loan from the bank. The loan was repaid in full after auditors told the district that it is illegal to use district assets as collateral.
The illegal loan only intensified speculation among parents and teachers looking for answers.
"Glad I decided this year was the last for my kids at this school!!!" one Facebook user wrote on an anonymous post on a local message board. "So sad our children have to hear and worry about this! Just not right. Just a reminder to the guilty, greed is one of the deadly sins."
Dropping enrollment
A few years ago, Caney Valley Public Schools had close to 800 students, Cantrell said. In the last couple of years, enrollment has dropped.
Many school districts in rural communities throughout the U.S. are struggling with similar declines. Statewide, public school enrollment declined by more than 10,000 students in 2026. The end of pandemic-era federal aid and rising fixed costs, such as building maintenance and energy expenses, compounded the issue.
Kacy Medlin is Caney Valley's technology director and the program director for its elementary after-school and summer school programs. She has been working for the district for the last 19 years, but she said it's gotten harder to retain students.
"With higher gas prices and things, parents are actually moving their kids to school districts that are closer to their work to accommodate for the fuel," Medlin said.
In 2023, Oklahoma passed a $150 million private school voucher program that uses tax credits to offset costs for parents who want to transfer their students out of public schools. This year, lawmakers increased the cap for the state's allocation to $275 million.
"We can't compete with that," Medlin said.
Lawmakers passed the increase with the stipulation that the state raise the minimum salary schedule for public school teachers by $2,000, but Cantrell said his district already meets that requirement as part of its efforts to recruit good teachers.
Cantrell said other legislative changes have also had ripple effects on schools like his in rural Oklahoma.
In 2021, the state updated its method for calculating student enrollment. Instead of relying on a weighted average of enrollment from the current year and the two previous years, the new formula uses the highest average daily membership from the current or prior years.
The change was intended to curb funding for empty classroom seats, but the shift was heavily debated and criticized by educational advocacy groups and lawmakers who argued it could destabilize district budgets experiencing temporary enrollment dips.
Independent of legal changes, birth rates in the U.S. reached a record low in 2024, meaning schools are getting fewer new students.
"Elementary is where we're losing most of our kids," Cantrell said. "Six or seven years ago, we had 400 kids in the elementary. Right now we're at 282."
Donating the difference
During the same board meeting in mid-May when auditors told members they were running out of time to cut down impending costs, Cantrell told the room that he was willing to cover the district's overencumbered expenses with a personal donation.
"I love this place," he said. "I will do anything it takes to make sure we are successful."
He said the donation won't have any strings attached. The district's attorneys have started sketching out an agreement.
"The board can come back next month and say, 'Hey, we really need you to retire,' and I'll retire," he said.
Caney Valley is set to exceed allocated spending on June 30. Cantrell vowed to have a solution ready for the next board meeting on June 18 — soon enough to ensure employees are paid.
Pruitt said he has no doubt Cantrell will find a way to meet the district's remaining $390,000 shortfall in a matter of weeks, even if it means putting his assets on the line.
"He's a good man," Pruitt said. "I know his heart. I've had prayer with him."
Unaware of Cantrell's plan to foot the bill, Morgan said he expects some people would be willing to donate money to the district if officials asked for help.
"I think there is a good chance that the community would help out," he said. "I'm not sure if we'd get enough support for $400,000, but I think the community would help out."
But Cantrell said he doesn't think it's fair to ask parents to pay for a mistake that he made. In messages sent to concerned community members and on social media, where dissatisfaction is brewing, he hasn't announced his plans to take out loans.
"The kids know who I am," Cantrell said. "The kids know what I stand for. They know that they come first."
This report was produced by the Oklahoma Public Media Exchange, a collaboration of public media organizations. Help support collaborative journalism by donating at the link at the top of this webpage.
