Thursday, January 09, 2014
Outside Firm to Investigate Schools’ $2 Million Shortfall
By James Lomuscio
Westport’s Board of Finance tonight voted unanimously to recommend the town hire independent auditor McGladrey LLP to investigate what caused the Board of Education’s $2 million shortfall in its 2013-14 budget of $104 million.
Board of Education Chair Elaine Whitney addresses the Board of Finance tonight. (CLICK TO ENLARGE) Dave Matlow for WestportNow.com
McGladrey’s analysis costing $15,000 is expected to be done over 30 days before the school board submits its 2014-15 proposed budget to the finance board.
John Pincavage, finance board chairman, put forth the motion, which had not been on the Board of Finance agenda, and it did not take long for Elaine Whitney, school board chairwoman who was in the audience, to object.
Whitney stressed it was the Board of Education’s “fiduciary responsibility” to conduct the inquiry with McGladrey and not to be left out of the loop.
She also noted that at its meeting Monday night the school board established its own Health Insurance Fund Review Committee comprised of three board members, Elio Longo, the assistant superintendent of business who discovered the shortfall attributed to his predecessor, Nancy Harris, and a citizen volunteer.
School board newcomer Paul Block insisted that the proposed independent inquiry lacked collaboration with the school board.
“I felt it was exclusive,” he said. “I’m concerned about the duplication of efforts. I would urge us to work together.”
The finance board was not buying it, particularly Brian Stern, vice chairman, who said it would look as if the school board were investigating itself.
“I’m worried about public perception,” he said, likening it to foxes guarding the hen house.
Conversely, Whitney said the school board would be seen as “abrogating its responsibility,” leaving the study to another town body. Finance board member Tom Lasersohn said that was not the case.
“The issue for me is data,” said Lasersohn. “We have to make sure we can track every dollar and tie it to an expense.”
So far, the shortfall has been attributed to exorbitant health claims for that year and a depleted contingency fund. No one has suggested any malfeasance, just poor bookkeeping.
“We need to do a forensic analysis of every dollar that flowed out ...and why we have this huge variance,” said Lasersohn.
Pincavage noted that the McGladrey review would focus only on the health insurance portion of the budget, but depending upon what is discovered, the study could become more expansive.
Selectwoman Helen Garten seemed to agree with Whitney and Block. Garten said she was concerned the independent auditor and the school board would be “moving on dual paths,” and that perhaps the school board should expand its committee to include members of other town bodies.
Among the members of the public who spoke in favor of the independent study were Representative Town Meeting (RTM) members Don Bergman and Jeff Wieser and Second Selectman Avi Kaner.
Kaner stressed the review had to be factual, independent and credible.
“If you have the Board of Education run the audit, it will not be independent,” Kaner said.
“We’re talking about a 30-day analysis,” he added. “You’re getting a big bang for the buck. This will be the best $15,000 we spend.”
First Selectman Jim Marpe, who spent eight years on the school board and served as its vice chairman and acting chairman, favored the independent study. He said the Board of Selectman would vote on authorizing it at a special Friday morning meeting.
“I see this as a lifeline being offered to the Board of Education,” he said.
Comments: Comment Policy
A $2 million dollar shortfall definitely should have an independent review.
When we are talking about a $2 million discrepancy, an independent audit is certainly in order. Very disappointing to see Ms Whitney fighting against this proposal.
This issue is big and Westporters should get vocal. The Board of Education wants to audit itself which is clearly inappropriate. How could we trust the final results? What organization, when a real financial issue develops, allows that organization to investigate themselves? I am not saying the BOE did anything wrong, but something happened and we need to know what and why.
The BOE should want an independent review. It can only bring questions to all the residetns if they don’t. You have to start questioning the motivation of the BOE to try and control the audit.
The BOF should hold firm and demand the audit be under their control. Jim Marpe and Avi Kaner should also demand it too. It should be done for clarity and independence.
The net result of what has happened is our taxes will probably go up. We have a $2,000,000 shortfall that needs to be covered by Westport taxpayers.
I am quite surprised that the BOE is not asking the BOF to do the audit. The BOE must create an environment that is open and one of trust, get to why and what happened, and then put in the procdures and policies to stop it from happening again.
Anytime an accounting problem arises it has to be dealt with quickly and by a totally independent accounting organization.
I just hope that all we are dealing with here is a $2,000,000 shortfall. The auditors should have enough latitude to go further if they uncover data that leads them to believe the financial books for the school district are poorly kept or inaccurate.
Where there is smoke there usually is fire.
I agree with the Board of Finance’s decision - there should be an audit and, definitely, it should be an independent audit. Thank you BoF members for making this happen.