By LISA CAPOBIANCO
After the Board of Education ended Fiscal Year 2016-2017 with an unexpected $2.4 million deficit, school and city officials hope a forensic audit will determine what happened.
Last Thursday, city officials announced their request for a forensic audit to be conducted for the Board of Education’s FY 16 and FY 17 budgets. Thibeault and Mayor Ken Cockayne asked the city purchasing agent to prepare a Request for Proposal for the audit, which will give the city a complete view of the board’s finances.
Board of Education Chairman Chris Wilson said the board has agreed to pay for half the cost of the audit, which is “needed and welcomed.”
“We all want to get to the bottom of this,” said Wilson. “The board appreciates the Board of Finance addressing this issue as quickly and promptly as possible.”
Board Commissioner Jeff Caggiano said the audit makes sense, especially if the same error occurs during FY 18.
“Additionally, I think it also would eliminate any appearance of a conflict,” said Caggiano.
The city comptroller’s office discovered the deficit before the Board of Finance meeting last Tuesday while closing the financial records for FY 17 and preparing for the year-end audit.
During its meeting, the Board of Finance then approved an additional appropriation of $2.4 million for the school budget. School officials and administrators were not aware of the deficit up until that point in time.
Board of Finance Chairperson Cheryl Thibeault was surprised by deficit, since the district projected to end the fiscal year with a $500,000 surplus just several weeks ago.
“The fact that they weren’t even aware that they were so off track is troubling and scary,” said Thibeault. The board also ended FY 16 with a $2,044,817 deficit. At that time, Thibeault and other city officials recommended setting up a separate fund to better manage special education costs in the school budget. However, school officials did not move forward with this recommendation.
If approved by the Board of Finance, the goal is to complete the audit by the end of the year.
Thibeault said the audit will verify that finances are correct while looking into how finances are recorded in the budget, so the district can understand when it starts to “get off track and take action at that point.”
Last Thursday, the Board of Education discussed the situation further during a special finance committee meeting.
Wilson said it appears that there some “irregularities” in how the budget was initially set up in addition to unexpected special education costs with an increased enrollment over the prior year. During the 2016 budget process, explained Wilson, it appears that placeholder numbers were recorded in the budget. However, the actual appropriation approved for each line item in the budget never changed.
“The documents that were presented to the Board of Education for review did not represent the true numbers,” said Wilson.
This error comes at a time when the district has gone through two business administrators within the same year. Last month, Steve Nembirkow resigned from the district. When this unexpected resignation was brought up during a recent Board of Education meeting, Wilson said Nembirkow cited “personal reasons” for leaving the district.
“It is easy to jump to conclusions or point fingers in a crisis like this, but I think it will be important to understand how this happened, and then take corrective action,” said Caggiano.
“With the Bristol Board of Education focused on doing all that we can to provide the students of Bristol Public Schools with the best education possible, it is unfortunate that some of the folks over the course of time in our business office, have left us with a huge financial void to fill,” said Wilson.
In response to the unexpected deficit, the Board of Education will use an outside firm to conduct an operational audit of the budget. This firm will serve as the district’s interim business officials to review the current budget and ensure that every line item actually reflects the board’s anticipated costs and appropriations authorized by city officials.
Moving forward, school officials and administrators will review all procedures and monitor them to make sure this situation does not happen again, said Wilson.
“The board will review all who supervise and monitor the finances in the district to ensure ‘best practices’ are being conducted,” said Wilson, adding that the board also will keep the Board of Finance abreast on the district’s finances every month.
Caggiano suggested that the board have at least three budget hearings before voting on any budget. He also recommended a change in the charter to require a Board of Finance liaison be a part of at least two of these budget hearings.
“Although it may not have caught a mistake like this, it will at least guarantee some oversight and cooperation,” said Caggiano.
On the city side, Thibeault said two different task forces have formed within the Board of Finance, including one that will work directly with the Board of Education to improve communication. The other task force will focus on the city budget itself.
“We all come out of the same pocketbook at the end of the day. It’s important that we all work together for that same purpose,” said Thibeault.
“Our town officials and our school community, have and will continue to work together, not only to find answers, but to make sure that the business of educating our young people will go on without interruption,” added Wilson.