School Dept Finances shouldn’t be run under a Don’t Ask – Don’t Tell Policy!

II. Budget

State law: The school committee reviews and approves budgets for public education in the district. (G.L. c. 71, [[section]] 37) The committee must hold a public hearing on the proposed annual budget. (G.L. c. 71, [[section]] 38N) The school committee has authority to determine expenditures within the total appropriation voted by the city or town. The city or town appropriating body is authorized to make non-binding monetary recommendations to increase or decrease certain items allocating such appropriations, but it may not limit the school committee’s authority to determine expenditures within the total appropriation. (G.L. c. 71, [[section]] 34)

I am no Fiscal expert, don’t pretend to be, don’t play one on the School Committee or radio and am no self proclaimed “fiscal watchdog, I’m someone who has an interest in protecting our educational money and making sure it is accounted for honestly and clearly.

When I ran for the School Committee I said I would look into and monitor the finances but never did I expect to find out that this Administration would go around the School Committee and submit a budget on their own, yet that is exactly what happened.

Last May following the recommendation and presentation of a School Budget by the Superintendent that was $860,000 more than the City Manager proposed and based on the possibility that the city could receive and additional $600,000 in Chapt. 70 funding in a proposed unapproved Senate budget the School Committee voted for a budget with a bottom line figure of $162,942,846.

The Superintendent has and will blame the City Manager for going with the Senate version but the reality is he is the person who presented the budget to the school committee.

Without another vote of the School Committee to reduce the amount they had voted on and approved this Administration submitted a budget to the City Auditor for $162,073,364

Basically taking the money out of the approved Suspense Account which was supposed to be used for funding salary increases. The School Committee which has the authority on the School Budget and has a policy limiting how money can be transferred was never notified by the Administration on what they had done.

Then in August the Committee was presented with recommendations for budget reductions in the amount of $610,000 supposedly to create a level budget even though a level budget has been submitted.

For the next 6 months neither the Superintendent nor Asst Superintendent of Finance ever informed the School Committee that they submitted an unapproved budget. Nor did any of those School Committee members realize what had occurred so they never asked

The Finances of the School Dept can’t and shouldn’t be run under a don’t ask don’t tell policy. It seems the Administration runs it that way currently. If the School Committee doesn’t ask, the Administration doesn’t tell.

Imagine if a City Manager submitted a budget that was different from what the City Council voted on then purposely hid that fact and tried to give the impression it was only a minor procedural error!

Last week the School Committee was presented with the same dollar figures to transfer from the same lines that had been voted for reduction in August with the information it was going to the Suspense Account then would need to be transferred to the salary accounts to fund increases.

This information is frightening on many levels especially when you look at the history of some of the other fiscal issues this Administration has presented.

In the June 21st School Committee meeting they had an end of the year “Forecast” that stated they expected to have zero money left over.

Included in that Financial Report it clearly shows a remaining available balance on the Health Insurance Line (53600)

Then at the August 16th School Committee meeting the following Information was distributed.

Yet there has never been a clear answer to how you go from having in June expenditures of $14,971,856 with a remaining balance of $73,742 to a deficit in August of $661,795.68 with expenditures of $15,707,123.68 when the Fiscal year ends June 30th

We know that this Supt and his Administration screwed up the Circuit Breaker Account in 2016 resulting in the remaining funds being returned to the General Account of the City under state law. The CFO and Supt. cost the School system $500,000 in UNUSED Circuit Breaker money by NOT knowing the amount that could be carried over even after DESE issued a “reminder” in April.

The multiple transfer fiasco’s also in 2016 which was associated with multiple transactions in June of 2016 that saw the Supt charging $80,000 of his salary, $40K of the CFO’s salary and $30K of the HR Directors Salary to the to food service account so he could cut PO’s for what he decided was Computer / Technology needs without clearly explaining to the School Committee what he was doing.

The Outside Auditors that review City Finances had this to say about that process.

Auditor’s comments:

“The School Department transferred approximately $1.0 million from the Milk and Lunch revolving fund to account for indirect charges originally charged to the general fund budget. Normally any indirect charge transfers anticipated are incorporated as part of the formal budget process. This gives the City Council all necessary information to make an informed decision regarding the approval of appropriations. In this case, the $1.0 million transfer was not approved in the formal budget. This is significant because had the transfer been part of the budget the City Council may have reduced the School’s appropriation request by the amount of the anticipated indirect cost transfer. The Transfer was determined after year end and had the impact of increasing the School’s available appropriation by the $1.0 million charged to the Milk and Lunch revolving fund”.

The Auditors also highlighted issues with the usage of Grant Funding –

The Lowell Public Schools receive significant federal education grant funds. We noted during 2016 that the City returned approximately $508 thousand of federal funds that were not spent during the grant year to the Department of Elementary and Secondary Education.
Although these funds can generally be re-applied for in subsequent periods the City is at risk for having future funds under the programs reduced because current year funds have not used.

We recommend that management evaluate these programs to determine the underlying reason for the return of funds and develop a plan to maximize the benefits that these programs provide.

The explanation submitted by he Superintendent didn’t make total sense

Management Response:
The $508,000 given back to the Department of Elementary and Secondary Education was carried over to the next fiscal year and expended on the special education summer school program. This has been a practice that has been in place for many years at Lowell Public Schools and other districts nationwide. The grant was from IDEA (Individual Disability Education Act) 240.
Next year the IDEA 240 grant will be a 2 year grant. Therefore, the districts will be given the opportunity to move funds from one year to the next without having to return the funds.

How is something simultaneously given back and carried over? In a time of tight budgets how can you justify returning any grant money and how much will the audit of the 2017 books show what was returned? Why doesn’t the Superintendent who informs the committee when grants are received not inform them when grants are returned?

If the Committee doesn’t ask, the Administration doesn’t tell!

The way the budget is presented, the School Committee updated and the fiscal year closed, has been a nightmare under this administration and needs and will be addressed beginning with the Finance Subcommittee meeting this Wednesday at 5:30 pm

From Superintendents contract

Published by Lowell School Committeeman Gerry Nutter

I've been interested in Schools since I worked at the Greater Lowell Tech and substitute taught in Dracut. I've followed the finances and issues with the Lowell School for the past 8 years while blogging and contributing to Saturday Morning Live! Currently serving my 1st term.

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