(skip this header)

Westport News

Wednesday, April 23, 2014

westport-news.com Businesses

« Back to Article

$2M schools deficit is 'Grinch that stole Christmas' to stunned financiers

Published 1:43 pm, Monday, December 16, 2013
Larger | Smaller
Email This
Font
Page 1 of 1

An audit of Board of Education financial records may be in the offing after the Board of Finance was stunned to learn last week about an estimated $1,988,709 shortfall in the school board's 2013-14 budget.

The "significant projected shortfall" is attributed, in large part, to underfunding the health insurance fund for school employees, school board Chairwoman Elaine Whitney told the finance board last week.

"Give me some smelling salts," reacted Michael Rea, a finance board member, on hearing the news.

Superintendent of Schools Elliot Landon explained the shortfall was uncovered by the school district's new business administrator, Elio Longo, who brought it to his attention on Nov. 20.

"From an administrative point of view, there were serious errors in information recording in doing the budget" for the current academic year, according to Landon. While he said there was a "poor job of budgeting, nothing illegal occurred."

Landon admitted there were "some gross errors, but no malfeasance."

"It sounds to me that you are right," said finance member Tom Lasersohn, who added the information was "a lot to digest."

Rea agreed, telling school officials, "You guys are the Grinch that stole Christmas."

Whitney said that, to make matters worse, although the school board's insurance consultant had recommended setting aside a $750,000 contingency fund "that was never included in the budget."

She said that a contingency fund hasn't traditionally been allocated in the education budget, but they will consider doing so in the future.

Brian Stern, the finance board vice chairman, asked about the education system's monthly budget reports, and questioned if the errors "shouldn't have popped up prior to Nov. 20."

Landon said it took Longo, a relatively new administrator, a while to research data to come up with the figures.

"This is a big number, not just for the Board of Education but for the town," said Stern, adding he felt it was "totally premature" to comment on the issue at the time.

"We are not here to embarrass anybody, we just want to get it right," Stern said.

"Are you pretty confident this is the right number?" asked finance member Janis Collins. "We have a high degree of confidence that's the shortfall amount," Whitney replied.

She said the school board had a special meeting just prior to last week's finance session and approved hiring an auditor. The cost, however, would be between $35,000 and $65,000 she said.

Whitney said the audit would look specifically at the health insurance accounts to determine the cause of the errors and devise ways to prevent the shortfall from happening again in the future.

Lasersohn said he didn't see the value in hiring an auditor right away, especially if the shortfall is a budgeting problem.

He felt having a workshop, where members from both boards could "sit down and roll up our sleeves" to discuss the matter, would be more worthwhile.

Collins also said it is important to figure out how the projected shortfall in 2013-14 would affect preparations for the next school budget.

Landon said there is a possibility the budget for 2014-15 would include "the shortfall plus whatever we are proposing."

Lasershohn said there could be a "huge increase," adding, "It will be horrible, but we will have to deal with it."

While specific dates for the workshops weren't set, it was agreed they would take place early in January.