Winchendon school board wants state to oversee town finances
By Paula J. Owen TELEGRAM & GAZETTE STAFF
WINCHENDON — The School Committee voted unanimously Thursday night to request Department of Revenue oversight of the town's finances and to have a forensic audit and an investigation conducted into "what really happened" to cause a deficit of nearly $4 million in this budget cycle.
School Committee Chairman Michael Niles outlined the School Committee's position in a written statement, arguing that the committee does not support Town Manager's James M. Kreidler Jr.'s recommendation to create a townwide Director of Finance position. The recommendation, he says, does not comply with state law, according to the Massachusetts Association of School Committees and Massachusetts Association of School Superintendents, and would contradict the Education Reform Act.
"While the School Committee agrees with the need for the deficit legislation, the component regarding the creation of a town-wide Director of Finance position is not acceptable and therefore the school committee does not support the creation of the Director of Finance position as described in the proposed deficit legislation," Mr. Niles wrote. "Control of school finances and/or supervision of the School Business Manager are the sole responsibility of the School Committee as prescribed in Mass General Laws."
He adds that a DOR appointment of an unbiased individual or board would help restore normalcy in the town.
"The distrust and disagreement between the schools and town administrations are rooted primarily in financial concerns and have existed for years and span several school administrations," the letter states. "It will be several months before trust is regained and a normal working relationship is re-established. Oversight by an unbiased and trusted state-appointed unbiased individual or board will help restore normalcy."
"The costs for the forensic audit and investigation will undoubtedly be significant but absolutely necessary to restore public trust and confidence," Mr. Niles' letter says. "In light of the financial difficulties currently faced by the town, we recommend that these costs be added to the deficit legislation."
Mr. Kreidler did not immediately respond to a request for comment.
On Oct. 27 at a joint meeting between the School and Finance committees and the Board of Selectmen, Mr. Kreidler submitted a deficit reduction plan that includes proposed deficit legislation, cuts to town employees' hours, a $250,000 cut to the school budget, use of $1.6 million in stabilization money that would deplete that account, and an $800,000 Proposition 2½ tax cap override.
Auditors first uncovered a deficit in fiscal 2013 in the millions, much attributed to annual underfunding of the town's health insurance trust fund. The town is self-insured, but is switching to premium-based coverage in January.
The School Committee is also requesting reorganization of the town's insurance committee, to include representation from every labor group in the town and the schools, town and school administrations and an insurance consultant.
"This committee will report its recommendation to the Board of Selectmen," Mr. Niles' letter states. "Currently the (insurance) committee is only an advisory board and the decision-making and management is exercised exclusively by the town manager. The current process resulted in a significant deficit in the insurance trust fund."
Auditors told the School Committee at a previous meeting that the insurance trust deficit, a lack of communication, double accounting entries and inaccurate reports, and a crash in MUNIS — the town's financial software — that permanently damaged records, all contributed to the town's financial breakdown.
School Superintendent Salah E. Khelfaoui said the School Committee will submit Mr. Niles' letter to selectmen Monday night at their meeting, and will also send it to the Finance Committee, DOR, Department of Elementary and Secondary Education and local legislators.
Contact Paula Owen at powen@telegram.com. Follow her on Twitter @PaulaOwenTG.
Would the finances include the schools budget and spending? Does the town have a clue what the cost of real insurance is?
ReplyDeleteDo they still have the police station on their mind for a project with all the spare money gone?
The state needs to get the grip and not only because the school says so. All Winchendon tax payers should be outraged at this and to no fault of their own will pay the price for the team failures we now see and have to deal with. To not clean house after this would say this is normal to expect. It's not by any means.
Would the town manager have a plan B to offer the state if the override fails. Without change the town tax payers may think the new revenue will get lost also. The truth may be the situation needs to be handled by the state and a new tax rate ajustment put in place to handle the needs of the town of Winchendon. If the state can fix the problem it will be on the backs of the tax payers again. So if the override will get voted down and the cuts of 800k are needed then the town votes to take it out on the workers as in layoffs. It all comes down to the lesser of two evils and the choice is for the tax payers to be the fall guy again.
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