Financiers rip Landon on unreported budget transfers to cover Kings Highway deficit
Updated 9:47 am, Thursday, September 4, 2014
Facing harsh criticism from the Board of Finance, Superintendent of Schools Elliott Landon on Wednesday defended juggling $1.65 million between budget accounts over a four-year period without telling town officials because he considered the lead and mold cleanup at Kings Highway Elementary School "an emergency."
But he promised not to repeat the unauthorized financing practice.
An ongoing internal audit of school spending recently revealed that a $1,649,969 deficit in the Kings Highway heating, air conditioning and ventilation project was covered by school administrators who shifted money from the operating budget's utility, maintenance and project accounts to meet costs for the capital project that was originally slated to cost $2,878,000, but ballooned to $4,527,969.
"It clearly is an embarrassment to the financial systems of the town and the Board of Ed that we are actually having this conversation tonight," said finance Vice Chairman Brian Stern, following a presentation on the issue by Lynn Scully, the town's internal auditor.
The audit findings, which had been under review by the finance board's audit subcommittee, were detailed for the full panel Wednesday.
Stern and other finance members were concerned that public trust regarding the school budget had been compromised by the revelations, even though there was no evidence of malfeasance. He and others said the discovery also casts doubt on other education budget decisions made in recent years.
"We rely on the budget book to make decisions," Stern said, noting that emotions run high when "parents are told that we can't do things because we don't have the money ... all sorts of very good projects."
Stern referenced the Kings Highway overruns as the second "rock" turned over this year in the education budget -- the first being controversy earlier this year over initial reports that the health account was running a large deficit but later reported as a surplus. That had prompted the creation of a finance board subcommittee to audit operations in public school spending.
"I'm shocked that $750,000 in (each of) the last three years ... approved in the operating budget to go to the education of kids went to other things," said finance member Tom Lasersohn.
"I think this is a relatively big issue," he said, noting that accurate numbers are required for the finance board to make informed decisions. "If those numbers aren't accurate ... then we don't have the confidence to make those decisions and we can't allocate resources appropriately."
"One person doesn't get to do it," he added. "In order for people in town to have confidence, there has to be absolute transparency and absolute honesty in these budget numbers."
Other finance board members were more conciliatory, noting that mistakes had been made in financing the project, but now officials should move forward with a goal toward encouraging a more transparent budgeting process by school officials.
"I think tonight what you're seeing is that we feel very good about making a number of suggestions going forward," finance member Jennifer Tooker said, noting, "increasing transparency ... as a discipline and as a way of doing business."
"The board gives the administration the power to do that transfer," finance member Janis Collins said of mid-year transfers of line items that are within the same area. "What they need board approval for is between different categories."
"It's somewhat vague in its wording about that," she said of the state laws governing the transfer process. "That's something that the Board of Ed probably needs to look at," she said, noting that Landon was supposedly going to share details on mid-year budget transfers with the board going forward.
Landon answered the direct question of whether in the future he would cover budget transfers without informing other officials with a clear, "No, I definitely would not."
However, he defended his decisions, arguing that his decision was in the best interest of students and the town to facilitate the work.
"I made a business decision," he said, explaining that classes at Kings Highway would have been delayed and students would have had to be relocated following discovery of lead paint there in summer of 2012.
The decision, Landon contended, "can be forgiven in the haste with which it was done because we had an emergency situation," even though mid-year budget transfers relating to the project began two years prior, according to Scully's report.
Following a legal battle with the first HVAC vendor, who left the job in 2012 following discovery of the lead paint, another vendor was hired by Landon's administration without the project going out to bid -- an apparent violation of municipal purchasing regulations.
Asked why there had been significant amounts of unspent money in utility accounts that was used to cover the overruns, Landon said, "The truth of the matter is that we made our best estimates on utilities. They were volatile."
"It's a lot of money," he said of the $1.65 million of the Kings Highway deficit, "but in terms of a $110 million (overall budget), I think we did one hell of a good job of managing our money, not coming back to the Board of Finance, not placing additional burden on the town of Westport."
Allen Bomes, a Representative Town Meeting member from District 7, the only member of the public to speak on the matter, expressed feeling "violated" by the audit's revelations.
"This should have been done out in the open and it seems like someone should have known about this sooner," he said.
Bomes said the Board of Education has long maintained there is no room for cuts in its budget, and how "any dollar cut would directly affect something in the classroom."
"Mysteriously, over a three- or four-year period, quite a bit of money turns up that no one knew about," he said.
"There's some credibility loss."