By James Lomuscio
With a lot of numbers crunching, the Westport Board of Education’s Health Insurance Fund Review Committee today held its first meeting at Town Hall to dig deeper into the cause of the $2 million shortfall in the school system’s $104 million budget for 2013-14.
The Board of Education’s Health Insurance Fund Review Committee met for more than two hours today. (CLICK TO ENLARGE) Dave Matlow for WestportNow.com
Present at the meeting were school board members Brett Aronow, who chairs the subcommittee, Paul Block and Karen Kleine, as well as Elio Longo, business administrator for the school system. Aronow noted that the fifth member, a citizen representative, has yet to be chosen.
During the hour-and-a-half meeting, Longo pored over health insurance revenues, expenses and variances, all them pointing to exorbitant and unanticipated insurance claims for 2013, about $1.3 million,
“There have been unanticipated expenses, and unfortunately we now find ourselves in a situation where the expenses and costs exceed the budget,” said Aronow. “Our purpose is to review the healthcare fund and to improve operational management.
“We are going to work with the Board of Finance, the Board of Selectmen and talking to the town’s external auditor,” she added.
Among the handful of present at the meeting were First Selectman Jim Marpe, Schools Superintendent Elliott Landon, finance board member Tom Lasersohn, Selectwoman Helen Garten, and Allen Bomes, a member of the Representative Town Meeting.
The review committee’s first meeting followed Wednesday night’s unanimous recommendation from the Board of Finance that the town’s external auditor, McGaldrey & Pullen LLC, conduct an independent investigation into how the shortfall happened.
At that meeting Elaine Whitney and Block argued that the school board should be involved in the study, an argument the Board of Finance objected to in order to assure the public the analysis was truly independent and devoid of any appearance of conflict of interest.
The $2 million discrepancy, said to have ramifications as the school board prepares its 2014-15 operating budget, will be examined by the review committee over the next “two to three weeks,” after which the committee will be disbanded, Aronow said.
Landon made the Board of Finance aware of the budget blunder in early December, saying that the cost overrun had been exacerbated due to the fact “the recommended safety appropriation in the insurance account ($750,000) has never been implemented, leaving the reserve with zero dollars.”
The series of bookkeeping blunders began on June 30, 2012 when former Assistant Superintendent of Business Nancy 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, leaving the insurance reserve with a $500,000 deficit despite information showing a reserve of $2.5 million.
Meanwhile, according to Landon, health insurance funding levels for this year “double counted” a projected savings of $402,000. Longo discovered and first notified Landon of the discrepancies in November.
