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Thursday, December 12, 2013

Schools’ $2 Million Budget Blunder

By James Lomuscio

As far as action items go, things went rather smoothly tonight at Westport’s Board of Finance meeting.

WestportNow.com Image
Republican John Pincavage was elected new chair of the Board of Finance tonight. Democrat Brian Stern was elected vice chair. (CLICK TO ENLARGE) Dave Matlow for WestportNow.com

Republican John Pincavage was unanimously elected chairman and Democrat Brian Stern, vice chairman.

The board also unanimously approved an appropriation of $249,587 to the Levitt Pavilion account for contingency costs on the construction of the new pavilion. Also unanimously approved was an appropriation of $497,595 to be reimbursed by a state grant for new downtown sidewalk curbings, street lamps, trees and other infrastructure.

Again, action items, of which there were eight, went smoothly. It was the final, eleventh-hour discussion item put forth by Schools Superintendent Elliott Landon that left finance board members flabbergasted.

The school system’s 2013-14 $104 million budget is almost $2 million in the hole due to insurance reporting errors attributed to former Assistant Superintendent of Business Nancy Harris and discovered over the past several months by her replacement Elio Longo.

Compounding the problem, said Landon, is the fact that “the recommended safety appropriation in the insurance account ($750,000) has never been implemented, leaving the reserve with zero dollars.

“On or about November 20, 2013, Mr. Longo indicated to me that in his need to address inconsistencies in the insurance account, he discovered a substantial shortfall in budgeted funds,” Landon told the finance board.

Landon choreographed a series of budgeting errors that began on June 30, 2012 when Harris’s financial report indicated that the insurance account held assets of $2,497,462, when in fact unreported claims left a net asset of $1,055,648.

“The actual insurance reserve on June 30, 2013 proved to be $500,000 in deficit,” said Landon, despite information showing a reserve of $2.5 million.

Meanwhile, Landon said, health insurance funding levels for this year “double counted” a projected savings of $402,000.

“These were serious errors in information we received in putting together this budget,” said Landon. “Our examination indicates that this was a poor job of budgeting. Nothing illegal occurred…gross errors and no malfeasance of any kind.”

School board Chairwoman Elaine Whitney addressed the Board of Finance after Landon spoke.

“Any questions?” she asked.

“Questions?” blurted Michael Rea. “Get me some smelling salts. This is an awful lot to swallow.”

Finance board member Tom Lasersohn agreed, “This is a lot to digest.”

Board of Finance members agreed they would study Longo’s report to see how the errors were made, errors that affected the overall school and town budgets.

“The idea is not to embarrass anybody,” said Stern. “It’s to get it right.

“This is a big number, not just for the Board of Education, but the town,” he added.

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Posted 12/12/13 at 04:09 AM



Comments

Comment Policy

Everyone makes mistakes and we must support our students—however,I have a suggestion .

Given Dr Landons outsized salary—maybe he could
contribute a small amount to helping restore this egregious error on behalf of the students and taxpayers.

We all know that we watch our own money much more prudently.

Rob Adler

Posted by Rob Adler on December 12, 2013 at 01:31 PM | #
 

good idea!

Posted by Beatrice Crane-Baker on December 12, 2013 at 01:56 PM | #
 

John Pincavage will make a great Chairman and now he really has a great project to work on. Perhaps an audit should be performed on the BOE’s books. Is the $2mm the tip or the base of the ice berg? Mr. Adler’s comment is right on. Instead of having Mr. Landon chip in and help cover the shortfall of $2mm, he should be fired because this huge error happened on his watch.

Posted by Tom Bloch on December 12, 2013 at 02:51 PM | #
 

What an embarrassment, especially in the light of the glowing tributes paid to Ms Harris upon her retirement earlier this year by Dr Landon and Ms Whitney (see http://www.westportnow.com/index.php?/v2_5/comments/42316/). And who knows what other errors are lurking in the books? An outside firm needs to be brought in without delay to perform a full, independent audit.

Posted by Paul Bradshaw on December 12, 2013 at 03:15 PM | #
 

Someone better alert the New Canaan BOE
(see http://www.ncadvertiser.com/24386/school-opens-today-with-lower-enrollment-52-new-staffers/)

Posted by Dick Lowenstein on December 12, 2013 at 04:05 PM | #
 

firing him doesn’t get us our money back…

Posted by Beatrice Crane-Baker on December 12, 2013 at 06:02 PM | #
 

Mr.Bradshaw is right on. An independent audit needs to be done on the books of the school system. It seems, by the limited information noted, that the budgeted line items were never funded to anywhere near the amount reported.

This amount of money is not chump change and hopefully this monumental screw up is not indicative of accounting errors yet to be uncovered.

Posted by Tom Bloch on December 12, 2013 at 07:54 PM | #
 

Does anyone else find it too convenient that all blame has been placed on a former employee- the former Asst Superintendent? Transparency doesn’t seem to be a tool our Superintendent uses, but is certainly warranted in this case. I personally have not seen a great track record with finances- do you recall the $300k+ savings in bus fees that the FIRST extended kindergarten days promised? Oh, wait, Elliott retracted that claim the next day after the board voted the change through.

This is a symptom of a greater problem.

Posted by Laureen Haynes on December 13, 2013 at 03:38 PM | #
 

A little over $200 per tax paying household…

Posted by werner liepolt on December 14, 2013 at 05:08 PM | #
 

How can Landon say there in ’ no malfeasance of any kind.”?  Would it not be better for him to recuse himself and have a full investigation done?  Something does not feel good having the leader who found out there are accounting issues in his organzation and the largest budget in Westport (and where is the money?) just say there is no real issue.  How does Landon know this was not done on purpose?  Interesting.

We need auditors to get in immediately and find out what happened.  How do accruals just disappear?  If the accuual did not happen—where did it go?  Where was this expense put?  Is it covering up for soemthing else?  If the accural is missing, then they should have not spent the full budget.  If they did, what did it go to?

Are there any other issues?  Who audits the school budget and how they allocate?  Did our auditors miss this?  How?  Who had oversight over Nancy Harris?  Is there double signatures required?  This is quite a large sum of money.

Sometimes, and I repeat soemtimes, where there is smoke there is fire.  Sounds a bit like OPEB?

We have new leadership and I am sure they are involved and will report back to us.

Posted by Bart Shuldman on December 14, 2013 at 08:40 PM | #
 

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