School Money Management Criticized

By John Voket

Superintendent of Schools Evan Pitkoff and Board of Education member David Nanavaty both acknowledged that they are not aware of where the $60 million Newtown education budget stands on a day-to-day basis. Maybe not even on a week-to-week basis.

The school officials also told finance board members Monday that $400,000 that was cut from the schools during final budget sessions has already been replaced by unanticipated revenue. But by the time that revenue was developed, it was too late to be applied to restoring popular programs like fourth grade band.

Those revelations came to light at Monday’s Board of Finance meeting during nearly two hours of discussion that at times enlightened and at others times confounded finance board chairman John Kortze.

During that session both Dr Pitkoff and Mr Nanavaty said they put their faith in the expertise of School Finance Director Ronald Bienkowski, and that they based their knowledge of the status of school budget dollars on monthly finance director’s reports and quarterly budget reviews presented to the Board of Education.

“We may not know the amount of money left in the budget on a daily basis, even week-to-week, but I can say with 100 percent certainty that at the end of the fiscal year, we will be in the black,” Mr Nanavaty told the finance panel.

After reviewing recent school finance reports, finance board members asked to meet with Board of Education representatives to get a better understanding of how the daily ebb and flow of money through the system was being tracked. Hoping to secure a better grasp on some of the intricacies of a hybrid system of bookkeeping developed by the school finance director, Mr Kortze asked Mr Bienkowski how he applies school funds to what at any given time, may add up to hundreds of encumbrances.

“Can you explain how you use encumbrances, and how it pertains to your budget?” Mr Kortze asked. “I though I would understand them better after reviewing [the finance report], but it confuses me more.”

Mr Bienkowski explained that when he arrived to begin working in Newtown, the district only encumbered certain purchase orders.

“But since I came [to Newtown], I decided to encumber other things like payrolls,” Mr Bienkowski said. “Encumbrances are made when we set aside dollars for a known commitment. But the easiest way to understand [the system] is with purchase orders.”

The school finance director told the finance board that in any supply accounts there may be a number of purchase orders encumbered for each line item. He said he began applying the encumbrance system in the payrolls because it represented money owed to particular teachers.

“Any time there may be 20–30 teachers in each account,” Mr Bienkowski said.

He said he also encumbered certain maintenance projects.

“[School Facilities Manager] Dominic Posca will act as our general contractor and he’ll contact the tradesmen and suppliers and apply the particular project’s encumbrance to his budget,” Mr Bienkowski said. He admitted that the school projects budget was one of the areas more frequently targeted for transfers to cover shortfalls in other departments throughout the school year.

Mr Bienkowski also explained that as the end of the year approaches, he has a much clearer idea of where surpluses may be found among the hundreds of budget lines and encumbrances that are funded. At this point, he said, the district can authorize Mr Posca to undertake particular scheduled maintenance projects that can be encumbered before June 30, and performed during the summer months with payments drawn from the former budget year’s encumbered funds.

Kortze: A ‘Complete Travesty’

As the evening wore on, the information appeared to raise the ire of Mr Kortze. At one point the finance chair asked point blank why school board members failed to tell taxpayers who pleaded for programs not to be cut that many of those programs had already been removed from the Board of Education budget months earlier.

“Maybe we like to see you squirm a little,” Mr Nanavaty replied with a smile.

In an interview following the meeting, Mr Kortze said he was convinced that the only person in the entire school system who knew any specific financial information on a day-to-day basis was Mr Bienkowski. And this made the finance chair somewhat uncomfortable.

“Of course that’s his job,” Mr Kortze said of Mr Bienkowski. “But don’t go telling the public and the parents that you have to cut programs and freeze budgets — that translates that the schools have no money.”

Calling the practice a “complete travesty,” Mr Kortze criticized other school officials and school board members for not demanding more timely and accurate accountability for taxpayers’ dollars flowing through the system.

“People vote for and entrust these public officials and they don’t even know what time it is,” he said. Mr Kortze pointed to the too-complicated budget and encumbrance system as the likely reason why school officials place freezes on budgets and purchases when a crisis occurs.

“If you had a better understanding of where the dollars are on a day-to-day basis, you wouldn’t have to wait until situations become so extreme that you have to cut programs or put freezes on,” he said. “And don’t incite the mobs to the point where parents come out, and children are coming to budget meetings crying about the program cuts. [The finance board] doesn’t cut those programs. Fourth grade band wasn’t even in the original budget this year.”

Mr Kortze said he spoke for others on the finance board who are growing increasingly concerned that few if any school officials besides Mr Bienkowski know where the budget stands at any given moment.

“We don’t think there is a general understanding of the day-to-day financial situation [at the Board of Education],” he said. “And not having that understanding leads to cuts and freezes.”

Mr Kortze said he observed a growing belief among parents and taxpayers that the reason school budget freezes and program cuts are affected is because the town has no money.

“This is two-thirds of the town’s budget,” he said. “All we’re suggesting is that maybe there is a better way to go about [handling school finances]. How can you look at the status of your $60 million entity four times a year? If this was private industry they’d all be in trouble.”

When asked what would happen if Mr Bienkowski was suddenly and completely absent from his position for some extended length of time, Mr Kortze expressed that he would not know where to begin dissecting the complex system.

“I just hope somebody over there besides Ron has some idea of what’s going on financially,” Mr Kortze said. “This is one reason why you shouldn’t give that much autonomy or responsibility for that much money to just one person. We’re fortunate to have such a capable person, and it’s not Ron’s fault that everybody defers to him.”