Eying Tough Budget Talks Ahead, School Committee Seeks Bids on Pre-Caruolo Audit

by | Jan 26, 2018

By Elizabeth F. McNamara

The School Committee voted Tuesday to send out a request for a proposal (RFP) for a two-pronged audit that would encompass both the district’s finances and education program.

The committee’s solicitor, Matt Oliverio, said he thought it was a good idea to send it out now, to get an idea of what such an audit might cost.

“I don’t know of any other district that’s gone out to bid for this type of audit,” he said during the meeting. “There is a sense of urgency to kind of move it along.… It’s in preparation for anticipating a deficit, anticipating that for a second year in a row you don’t receive adequate funding from the town.”

Oliverio has referred to such an audit as a “pre-Caruolo” action.

The Caruolo Act (R.I. General Law 16-2-21.4) outlines the provisions by which a school committee can sue a town council  if it determines the approved budget appropriation is not enough to carry out its contractual commitments, as well as basic mandates under state and federal law and regulations.

The School Committee asked for a $1.3 million budget increase last year – the most it could request, 4 percent of the $34 million it got in fiscal year 2017. The town gave the district less than half of that, $530,000.

There was some discussion about whether or not the committee could vote to send out the RFP since it was not on the agenda as an action item. But committee members ended up voting 7-0 in favor of sending it out because the agenda has a standing sentence that reads, ““Any items on the agenda may be subject to a vote.”

“You can put the RFP out there and we don’t have to act on it. Why shouldn’t we just put the RFP out there? We think we’re going to need it,” said Committee member Jeff Dronzek. “We don’t have anything to lose, except time.”

The panel also discussed year-to-date spending. Town Manager Gayle Corrigan said in December she would not entertain additional money for the schools until there was a better picture of where the district stood budget-wise.

According to school finance manager Christine Spagnoli, as of the end of December – halfway through the budget year – the district had a deficit of $518,443 (FY2018 year end projections). However, Mark and committee Finance Chair Jeff Dronzek both said that number could change based on a few unknowns.

One of those relates to the new health care plan approved by teachers and paraprofessionals and how it is paid for this year. The district is picking up the $4,000 co-pay for calendar year 2018, but will be reimbursed 50 percent by teachers. The question is, does the district have to pay it all in fiscal year 2018 (which ends June 30) or can the district spread that cost over the calendar year (which comprises half of fiscal year 2019). It’s complicated, and it depends on accounting practices. Spagnoli told the committee Tuesday she is still researching that answer.

The district is also short $72,000 in state aid due to the General Assembly’s failure to pass its budget last summer until weeks into the fiscal year. It’s still unclear, officials say, whether or not the state will be paying that money.

Another unknown is when and how much the district will be reimbursed for certain insurance claims it’s seeking for miscellaneous repairs.

There have been savings in some areas, including in the salaries budget line. Spagnoli said that was due to teachers on leave who are on a higher pay scale (step) who have been replaced by teachers at a lower step.

While that might help the district’s bottom line this budget year, Mark noted, that savings won’t translate to next year, once those higher-step teachers return.

“As we look at next year, we’re going to have to factor in the returning teachers,” Mark said.

Alternatively, the line item for nursing is already at 106 percent. The School Committee’s original budget request to the town had asked for $247,000 for nursing. Under the town’s lower appropriation, the line dropped to $174,000. That is one area the committee could look to for additional money from the town, since nursing services can be dictated by the need of the student population (i.e. students with medical conditions like diabetes that require regular attention).

There’s also the more than $100,000 that was needed to pay for an additional preschool classroom (due to higher than anticipated enrollment of preschool-age children with special needs whom the district is required to educate). The district has known about that expenditure since last summer but the town has so far refused to appropriate additional money for that.

“At what point do we start making a plan, given that we’re projecting a deficit?” said Committee member Matt Plain, referring to going back to the town for more money to cover this year’s costs.

“It’s a good question,” replied Mark. “There are some outstanding issues such as not knowing how much insurance is going to be reimbursing us. And whether or not we’re going to be able to account for some of the healthcare related costs next year instead of all in this fiscal year. I’m not sure we’d be ready to do it now .… When we get to February, we’ll have all of January’s number and a very good sense of February.”

Dronzek agreed.

“We could perhaps by that meeting start to put together what would be the costs that would be documented need,” he said.

The School Committee meets next on Feb. 6. The next budget update will be at their Feb. 27 meeting.

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