Commissioner Maher told the Nebraska State Board of Education on Dec. 5 that an internal change to how the department calculates TEOSA — the Tax Equity and Educational Opportunities Support Act distribution — caused an overstatement of free lunch counts and resulted in a significant recalculation of state aid. "The mistake is that of the Nebraska Department of Education," Maher said, explaining that a reporting update added an identified student percentage (ISP) and a 1.1 multiplier but that the department had continued to use raw CEP counts without applying that adjustment.

Maher said three districts will see significant negative prior corrections as a result of the recalculation: Omaha Public Schools, Grand Island Public Schools and Southern Public Schools in Wymore. He warned that exact dollar impacts are not yet known because the TEOSA recalculation also incorporates membership counts, annual financial report corrections and local valuation changes. "It's really impossible to tell you today the exact amount," he said, adding that the state auditor's review is what ultimately identified the error.

Why it matters: TEOSA is the state funding formula for Nebraska K-12 aid; changes to distribution affect district budgets and local taxpayers. Maher described the department's data workflow and safeguards — programmer extraction, independent verification by the school finance director, internal finance office review, and district-level review of TEOSA models — and said the audit process caught the mistake before final distributions.

Board reaction split along accountability and process lines. Board member Lisa Schonhoff thanked Maher for taking ownership but pressed for a timeline on corrective actions; Maher said he hoped to provide a substantive step-by-step proposal in January but did not commit to firm guarantees. Board member Deborah Neary defended the finance team and the audit process: "The system worked exactly the way it's supposed to work, which is it was found during the audit," she said.

Tensions rose when board member Kirk Penner, criticizing how details passed through the department and districts, told the board "OPS and 2 others of lesser degree stole educational dollars from the other 47 deserving school districts." Neary immediately disputed that characterization, saying, "No one stole anything. A mistake was made. An audit was done." President Elizabeth Tegmeier asked that personnel or HR matters be resolved privately, noting the executive committee had previously chosen to address a related concern by phone rather than in open session.

What happens next: Maher said the department is working with its finance team daily and with school districts to identify additional checks to reduce the chance of recurrence. He asked board members to hold him to account and said he would report progress in upcoming months. The board did not take any formal voting action on TEOSA at the Dec. 5 meeting.

Reporting note: The board's discussion included factual claims about the cause of the miscalculation, named districts affected, and an on-record disagreement over whether the error amounted to theft; the article quotes board members and the commissioner directly where they spoke on the record.