(skip this header)

Westport News

Friday, October 31, 2014

westport-news.com Businesses

« Back to Article

Report: Unexpectedly large health claims triggered school budget deficit

Updated 5:42 pm, Thursday, January 9, 2014
  • Elio Longo, the school district's business manager, explains the shortfall in the Board of Education's current budget during a meeting of an ad hoc committee looking into the matter. Photo: Anne M. Amato / Westport News
    Elio Longo, the school district's business manager, explains the shortfall in the Board of Education's current budget during a meeting of an ad hoc committee looking into the matter. Photo: Anne M. Amato

 

Larger | Smaller
Email This
Font
Page 1 of 1

Six health claims by school district employees, much larger than anticipated, appear to a major factor in the $2 million shortfall in the Board of Education budget, members of the board's ad hoc committee looking into the recently revealed deficit were told Thursday afternoon.

Elio Longo, the school district's business manager, reported that finding to the Health Insurance Fund Review Committee at its first workshop. The panel is also charged with coming up with recommendations to ensure a similar problem does not occur again.

Two of those health claims were close to "a half-million each," Longo said, costing the school system a total of about $1.3 million in unanticipated costs.

Board of Finance member Tom Lasersohn, attending Thursday's meeting, said the school board needs to "understand what those claims were," as well as when school officials knew about the claims "how it was communicated" to the board.

Longo, who discovered the shortfall in late November, said recommendations by his predecessor to reduce the board's cash balance in March, while it didn't create the shortfall, didn't help.

"We understand what happened," said board member Paul Block, an ad hoc committee member. "Now we have to figure out why."

School board member Brett Aronow, who chairs the adhoc committee, said it is seeking to find a solution to the problem. She said the committee will focus on operational management, and better reporting of budget issues.

Longo also gave a lengthy presentation on the school district's health insurance budget, saying officials need to pay attention to trends and fluctuations in the future. He also recommended a new process for tracking employees' monthly claims that will include a variance analysis and fiscal year end forecast.

Block said officials are now focused on reporting because "we need to have good information on time." He said they also need to "keep an eye on cash" and "be aware of any fluctuation."

Block added that, while the ad hoc committee is now just focusing on the health insurance account, the board could expand more aggressive reporting to all parts of the budget.

Wednesday night, the Board of Finance approved hiring the firm of McGladery & Pullen, LLC, at a cost of $15,000, to conduct an independent audit of the deficit in the health insurance budget.

Finance board member Brian Stern on Wednesday said getting to the crux of the matter is important to maintain public confidence in school officials.

That's why, he added, an independent, in-depth inquiry of the deficit and how it occurred is important. "It needs to be totally independent and antiseptic," he said.

The Board of Education, in mid-December, had also approved retaining the services of the same firm to conduct an independent audit, if needed, to confirm the amount of the shortfall, to determine the cause of the shortfall and to make recommendations for the future.

Superintendent of Schools Elliot Landon attended Thursday's ad hoc committee meeting, but sat quietly in one corner of the room.

Earlier in the day, he sent an email to parents, saying he is "completely confident that this issue will be resolved expeditiously and, as the chief school administrator responsible for the day-to-day operations of the school system," he is "committed to working with the Board of Education, Board of Finance, RTM and the towns' auditors to make this happen."

A memo attached to Landon's letter, from school board members, said they are "confident that this issue is a short-term problem that needs a serious review, but will have no impact on our children, teachers or staff."

On Friday morning, Landon is scheduled to present his $110,960,456 budget for 2014-15, a 6.51 percent increase over current spending of $104 million. He told the school board this week that more than 2 percent of the spending hike is needed to address the deficit in the current budget.

Landon said this is the first time in 15 years that he has been forced to deal with a shortfall when preparing his budget for a new fiscal year.

The Board of Education workshop on the new budget request is set for 8:30 a.m. Friday in the Westport Library's McManus Room.