The Board of Education, reacting to controversy that erupted with recent revelations on how cost overruns for Kings Highway Elementary School renovations were funded, on Monday considered a policy to specifically govern capital improvement projects in the future.

The proposal comes after a recent audit showed that more than $1.6 million in the school district's operating budget had been used to cover additional costs for cleaning up lead and mold at Kings Highway.

The item was added to the Monday night agenda at the start of the meeting by board Chairwoman Elaine Whitney. She said the policy will include a new reporting format concerning such projects.

Board member Paul Block said a policy on capital spending needs to be in place, adding that, in total, about $2.3 million had been transferred from operating to capital accounts -- "some approved, some not approved." He added that money could have funded "lots of programs."

"There should be a special approval to move money around," he said. "We can't allow millions not approved coming out of the operating budget."

Block said that, with a policy in place, "if we want to move money, it's voted on and everyone's covered." He added, "It gets voted on and it's a clean record."

"I'm afraid you're bringing out cannons when a fly squatter can take care of it," responded Superintendent of Schools Elliot Landon, who was harshly criticized at last week's Board of Finance meeting over the Kings Highway funding. "In the past with a serious situation -- like a few years a go -- the Board of Finance advised us to use funds for arbitration fees and settlements."

Block said, "I know you got verbals, but we have to be precise and have to put good practices in place."

Board member Michael Gordon said, "It might be worth getting together to get recommendations for the next (school board) meeting." He suggested the school administration come up with a draft proposal for that meeting.

Whitney said it would take a couple of meetings before a policy on capital spending is ultimately approved.

BOE member Karen Kleine suggested that some of the recommendations made by Lynn Scully, the town's internal auditor, in her report on the overruns for the Kings Highway project be considered.

An internal audit by Scully revealed that while $2,878,000 was approved for the project, $4,527,969 was actually spent -- a $1,649,969 difference.

The deficit was covered by using funds allocated for utility utilities in the operating budget, without notifying town officials.

The project initially was planned to deal with mold and air quality at the school, but during that process lead was also discovered, causing costs to balloon. After lead was found a new vendor was hired to complete the work.

During last week's finance meeting, Landon was asked to explain his reasoning in not taking the matter to the finance board. Landon said it was an emergency that needed quick resolution or the school administration might have been forced to find alternative classrooms for Kings Highway students until the work was completed.

Some finance board members expressed concern that public trust regarding the school budget had been compromised by the revelations, even though there was no evidence of malfeasance. They said the discovery also cast doubt on other education budget decisions made in recent years, and sharply questioned how such large amounts of money initially allocated for utility costs apparently were unneeded.