DeKalb County’s school system will need to cut money slated for school projects to close a recently discovered $41 million shortfall in funding, and two high-profile Dunwoody school projects are on the chopping block.

The Peachtree Charter Middle School track and final Dunwoody High School renovations are among the projects the board is being asked to remove. The projects were supposed to be paid for with Special Purpose Local Option Sales Tax money, but school officials now say they will need the money to finish bigger projects.

Peachtree Charter Middle was in the running for a $50,000 grant from Clorox Co. to replace the crumbling track, according to parent Stephanie Holmes. The grant was awarded to whichever school had the most votes submitted via text messages or the company’s website.

When the DeKalb County Board of Education in December said it found money for the track, Peachtree was in fourth place in the voting. It quickly plummeted to 12th after the board promised to pay for it, Holmes said.

“How do we go from that to a $41 million shortfall in three months?” she asked. “That’s the part I’m struggling with.”

It’s something school officials said they are trying to figure out, too. Officials discovered the first symptoms of the problem when they realized completing the rebuilding of Chamblee Charter High School would cost $10 million more than expected, schools spokesman Walter Woods said.

At the DeKalb school board’s Feb. 29 meeting, Superintendent Cheryl Atkinson informed board members of the problem. Atkinson is recommending the school cut costs from a list of 113 sales tax-funded projects to make up the difference and finish the big-ticket items on the list, like rebuilding Chamblee High. School board members have not acted on the recommendations.

Atkinson told board members there would be an external audit of the capital projects account to determine exactly how the shortfall happened. The deficit puts board members in a tough spot, said District 1 school board member Nancy Jester, who represents Dunwoody.

“I am furious because these mistakes were so preventable in my opinion,” Jester said. “I applaud the superintendent for finding it and bringing it to light quickly.”

Jester said she does not support the current list of recommended cuts. Funds for HVAC system improvements at Montgomery Elementary and for Americans with Disabilities Act-related improvements at Ashford Park Elementary were listed among the proposed cuts.

Caren Morrison, chairwoman of the Dunwoody High School Council, said the situation makes it hard for parents to believe what school officials say.

Morrison provided a list of unfinished projects that would’ve been funded with the $1.13 million left for finishing high school renovations, money the school now wants to spend elsewhere. She said the money was left over from $21 million in sales tax money allocated for the high school renovation project.

Morrison said some classrooms do not have white boards and said the moldy carpet in the band and orchestra rooms needs to be replaced. Morrison said some teachers don’t have desks. It’s a situation that is eroding trust between school officials and parents, she said.

“It’s distrust of their financial accounting and accountability,” she said.

So how exactly did this shortfall happen? Woods said there are still some unanswered questions.

Woods said school officials several weeks ago discovered the plans for rebuilding Chamblee High underestimated the costs by $10 million. They did some more digging around and discovered the problems were much deeper than that, Woods said.

School officials thought the third Education Special Purpose Local Option Sales Tax, known as SPLOST III, would pay for the projects and borrowed $300 million. However, they did not factor in the $60 million needed to cover the costs of borrowing, such as interest.

Woods said school officials located some additional money to make up the interest gap, but the system is still $26 million in the hole, which is the bulk of the $41 million.

In addition to needing $10 million to finish Chamblee, the school system also learned that while it expected $23 million in state money, it only received about $16 million and that the system needs $500,000 to close out the prior education tax, known as SPLOST II.

Jester said she does not understand how the system could have overlooked interest on the SPLOST III bond payments.

“How were we making interest payments? What were the mechanics there? I have questions about that,” Jester said. “I have to understand the mechanism of this problem. That bothers me tremendously.”

In November, voters approved SPLOST IV, renewing the penny sales tax for a new list of projects. That money won’t be used to tie up the loose ends from SPLOST III, Woods said.

“We want SPLOST IV to start with a clean slate,” Woods said. “Had we known about this in November we would’ve made some allowance in SPLOST IV. We didn’t know it until we looked at Chamblee High six weeks ago.”

Jester said it may be time for the state Legislature to pass a law requiring school boards to tidy up their books before approving a new list of SPLOST projects.

“When you run these programs one after the other, it muddies the waters,” Jester said. “It’s very confusing.”