Preliminary Findings Of School Audit Released

By: Alex Scofield
Published: 11/06/09

The more than $300,000 deficit in the school’s Fiscal Year 2009 budget is the result of accounting errors, not fraud, according to a preliminary report of a financial review conducted of the school’s FY09 finances.

Selectmen, who ordered the audit in August shortly after the district’s shortfall was discovered, said they were relieved to find that the deficit did not appear to be a result of any malfeasance.

“I think that it’s a good thing for the townspeople to know that this wasn’t the result of any fraud,” said selectman Chairman John A. Ford Jr.

Among the preliminary findings from auditor Sullivan, Rogers & Company that raised concerns with selectmen were more than $100,000 in expenses to the school lunch program that were charged to the district’s general fund.

According to the auditor, $95,000 in payroll owed to lunch program employees was paid for out of the substitute teaching line item and another $10,000 for refrigeration and cooler repairs were charged to the general fund.

“I was really surprised to see that,” Mr. Ford said.

However, Mr. Ford added that he thought the school district was capable of correcting most of the errors listed in the preliminary audit report.

Among the other errors listed was the inadequate logging of journal entries to accompany transactions, and the spending of funds marked for general expenditures to payroll accounts, and vice versa.

School committee Chairman Richard A. Lavoie said he was not surprised by anything he had seen in the Sullivan, Rogers & Company report.

“We’ve maintained all along that the deficit was not a result of any fraud. That was never even a concern for the school committee,” he said. “This report just substantiates that.”

In reference to the more than $100,000 that was transferred from the substitute teaching and general fund accounts to cover the school lunch program, he said he could not remember ever approving such a line item transfer.

Mr. Lavoie said that expenses related to the school lunch program were supposed to be paid through food sales.

However, he said it is not uncommon for the district to approve line item transfers from other accounts when the school lunch program is not selling enough food to cover its own costs.

According to Mr. Lavoie, no such line item transfers were requested in Fiscal Year 2009 by former business administrator Peter O. Simpson.

Mr. Lavoie said he wished to wait until the final report by Sullivan, Rogers & Company was released before making any other comments about the report.

He pointed out that as the selectmen’s letter of engagement with the auditor had been discussed and approved in executive session, he was not even exactly sure what kind of information they were seeking.

“We were never even allowed to see that letter of engagement,” he said. “It was very frustrating, because we don’t know what the auditor’s charge is.”

Mr. Lavoie said that he was interviewed by one of the auditors last Friday, during which time he was questioned about some of the school committee’s oversight of the business office.

“They wanted to know what kind of questions we asked the school business administrator during subcommittee meetings and how we verified expenditures,” he said.

Mr. Lavoie asserted that the school budget subcommittee, of which he is also chairman, was repeatedly assured by Mr. Simpson that the school’s budget was on track.

He said that he would await recommendations from the auditor that would help the school committee better oversee its business office.

Like Mr. Ford, Selectman Jamie J. Sloniecki said he was relieved by what he saw in Sullivan, Rogers & Company’s preliminary report.

“My question has always been, ‘How much of a shortfall would the school have had anyway?’ ” Mr. Sloniecki said. 
He said that from what he has seen in the auditor’s preliminary report, it appeared that the misappropriations made in FY09 only delayed the town’s discovery of a deficit that would have existed either way.

Mr. Sloniecki made headlines in September when he stated he told selectmen that if the town administrator had been responsible for the overseeing a budget that was overspent by $300,000 “he would be waiting for him outside of town hall to ask for his keys.” He said that he had made the bold statement in order to encourage people in the schools to step up and take accountability for their part in the budget crisis.

“Nothing was going to get done, if everybody kept hiding behind the excuse that ‘it wasn’t their job’ [to directly oversee the budget],” he said.

However, Mr. Sloniecki said he was not eager to oust either Superintendent Edmond W. LaFleur, or any member of the school committee.

“I think the school committee’s going to be a part of the solution to this problem. I don’t think voting to remove any members of the school committee is going to help anything,” he said in reference to a recent inquiry made at town hall about a recall of school committee members.

“I think people need to take accountability, but I don’t think it’s only going to be the superintendent,” he said.