Lehighton Area School District exceeded its special education instructional budget by $2 million, officials said Monday night, as the district grapples with the high cost of outside placements for students with intensive needs.

The financial strain emerged during a presentation of the district’s 2024-25 Annual Financial Report, which showed total expenditures reached $51 million against revenues of $49 million for the fiscal year.

Despite the special education overruns, the district ended the year with a $2.6 million deficit — smaller than the originally budgeted $3.3 million shortfall.

Board members raised immediate concerns about whether the problem will continue into the current year, since the budget was developed before last year’s actual costs were known.

The situation has prompted Lehighton administrators to develop strategies for bringing services in-house to reduce reliance on expensive external programs.

Business Manager Matt Lentz outlined the district’s approach to addressing the cost drivers.

“Development of additional programs that provide the same level of service that allow us to do it in a more fiscally responsive manner is what can hedge that budget from further increase,” Lentz said.

Building that capacity, Superintendent Jason Moser said, takes time and careful planning.

“We have to be strategic and do it in a manner that, first and foremost, provides the same level, if not higher level, of services to the students we are bringing back,” Moser said.

Lentz explained that the increased costs stemmed primarily from special education placements at outside facilities, where final reconciliations arrive well after the budget development process concludes.

“Primarily outsourcing services with other providers, we don’t get final reconciliations for those because costs can be dependent upon other districts’ enrollment,” he said. “So you don’t know those final costs until well after the district’s own budget development process.”

The district currently sends students to facilities like Behavioral Health Associates and relies on Carbon Lehigh Intermediate Unit programs, which use different billing models. BHA charges flat tuition rates based on program intensity, plus additional fees for transportation and related services. The IU uses a cost-share model where districts pay proportionally based on their enrollment in each program.

Director Joy Beers referenced historical data showing the magnitude of potential savings.

“Three or four years ago, we took what we paid each in a particular year divided by the students, and it came out to be like $65,000 per student that particular year,” Beers said, comparing that to the current per-student cost of around $22,000 for in-district education. “If we can find the staff and find the classroom and make it happen here, we can cut our costs.”

Lehighton has already made some adjustments, moving students back to in-district programs when outside placements weren’t proving effective. Sandra Michalik, LASD student services director, explained that attendance issues sometimes prompt reassessment of placements.

“Sometimes maybe one place is the least restrictive environment or the most appropriate for a student but they aren’t deriving the full benefit,” Michalik said. “Maybe we then look at another setting because the student isn’t attending and so forth.”

Michalik described the district’s active oversight of students in outside placements to ensure services the district is paying for are being delivered.

“I’m in very close contact,” she said. “I want the parents to know that I am present with their child, and they’re not just placed somewhere.”

Lehighton is also examining its billing practices for students from other districts who attend IU programs housed in Lehighton facilities.