Thursday, February 2, 2012

City Auditor: Board of Education Had $1M Deficit in 2011

The Finance and Government Operations Commission last night heard from Joe Kask, a partner in the accounting firm of Blum and Shapiro, which audited the financial statements of the city for the fiscal year ending on June 30th, 2011. Their report gave a glowing assessment of the city's financial book-keeping. However, Blum Shapiro uncovered several issues with the accounts of the Board of Education. These involved "internal control over financial reporting", and a combined "negative fund balances" of over $1M.



Blum Shapiro wrote in their draft letter about the management of finances,"We also recommend that the City and Board of Education determine how the deficit fund balances will be funded."

The commissioners were alarmed, Councilman Phil Pessina said, "It's a terrible time for us to be facing [a $1M] deficit."

The audit also noted exceptions to Board policies regarding the payment of vendors. These included the use of purchase orders issued to one specific vendor being used to pay multiple vendors, and the use of purchase orders without a specific vendor being listed. It also noted that the General Fund annual appropriation was over-expended by $67,000.

Councilman Tom Serra expressed his frustration at the accounting practices of the Board of Ed, even questioning the veracity of the numbers given to Blum Shapiro, "Is what they gave you the real thing?"

Tanya Oliver-Perry, in the City's Finance Department, told the Commission that it was very difficult to deal with the Schools Administration over the budget, "You can't get information from them, and you can't meet with them."

State law grants the schools nearly complete autonomy from the city in their financial decisions, Serra asked if this applied to the accounting, "Can the city take over the accounting of the schools?" Kask replied that there were some municipalities that combined the "back office" aspects of accounting for the school and the city. He said that a study would need to be done to determine whether a combined accounting office would be more efficient than separate ones.

Mayor Dan Drew said that the problems identified in the audit of last year's budget were being being addressed through the ongoing discussions with the Schools Administration and the Board of Education, "Some of the practices need to catch up."

Drew said the city is determining whether the city or the schools is responsible for covering the $1M shortfall.

10 comments:

Anonymous said...

You give the BOE money, they spend more than what they are given, and you're not sure who is responsible for the deficit. FIRE Frechette!

Anonymous said...

are you kidding me! the board of ed does not fully disclose what was spent and where. i cant believe my eyes! what a bottomless pit of failure. "but its for the children" bologna! you are getting robbed blindly by a failing administration as they line their pockets, not the teachers.wake up middletown and demand accountability!

Anonymous said...

So when is Frechette going to answer to all of these issues happening in our school system. This is beyond ridiculous and the city needs a complete overhaul of the school administration.

Anonymous said...

To all the Guiliano haters, shame on you for turing a deaf ear.
Kudos to the ex mayor. Seb your tried to bring this out but all of Middletown Dem's laughed, but look who is having the last laugh.
Tom Serra expressed frustation and is aksing if the city can take over the accounting part of the BOE. You're very funny Tommy Boy, wasn't this what the REPUBLICAN MAYOR wanted to do, but no you couldn't have it. You and your fellow democrates shot him down at every turn. Do you recall a time when people came forth to the WHOLE council with their concerns regarding the budget but refused to listen, do you recall angry parents, teachers and BOE staff telling all of you at a common council meeting that we needed your help, but no you couldn't do it and now you seemed shock by this news. This isn't new, this has been going on for over a year.
Maybe the democrates on the council past and present that wouldn't take a stance with Seb should cough of the million, or maybe all the democrated voters would like to have their taxes raised so that they could help offset the million dollars, I'm sure none of them would mine a higher tax rate after all it would be the democrates that are raising them.
All of this because this democrate town could not accept the fact that maybe just maybe a REPUBLICN knew what he was talking about.
Next election year, lets ALL vote with our heads and not with our parties, as you can see your democratic party just messed with you for the last year.

Anonymous said...

OMG

Anonymous said...

UNBELIEVABLE!!! when is it going to end???

Anonymous said...

The democrats can come into your house and rob you while you while you watch them, and they will still get voted in. The voters of Middletown are too stupid to vote for logic. As long as your a democrat, you can get away with anything. Pretty sad, but true.

Anonymous said...

So Chris Bourne was right!what say you mr. mayor?? nothing~

Anonymous said...

The Democratic Council & the City Dems all vilified Mayor Giuliano for trying to bring the BOE's misappropriation of tax payer money to light. He was publically mocked & ridiculed by the Dems for trying to resolve the issues through the court system in order to force the BOE to be held accountable because they refused to cooperate with the Mayor's office. Chris Bourne was not only locked out of her office at the BOE, but assaulted & removed from her BOE job by court order because she made public the BOE's wrong doing. So now does Mayor Drew demand a full investigation of the BOE, does he demand answers & accountability? No, he simply remains timid & submissive, stating that they are "continuing to communicate". The BOE fiasco cost Mayor Giuliano the election because no one believed his allegations. Drew built his campaign on his faith in the BOE, even dropping the City's lawsuit against them. What say you now Drew... who is going to pay to clean up this mess? It's going to cost tax payers a lot more than a day in court would have.

Anonymous said...

The statements released today unfairly shift blame to Carl Erlacher for warning Nancy Haynes to not spend funds that were not there. The City did not take BOE money for Special Education! I cannot believe Drew trying to shift blame or play they let's forget about it card. Unreal!!