The Middletown School District’s deficit for the 2021-22 fiscal year could exceed $2 million, the superintendent. Rosemarie Kraeger told the school committee on August 26.
The school department has yet to close the books for the fiscal year that ended July 1, and a third-party audit mandated by the city council is still ongoing.
An Aug. 3 memo from school committee chair Theresa Spengler to city council president Paul Rodrigues warned that as the remaining accounts are settled in the coming weeks, the final deficit could exceed the $1.8 million currently forecast, citing the balance sheet “liability accounts.” . . which show debit balances of medical and dental liabilities.
“These accounts have yet to be fully reconciled,” Spengler wrote. “But [they] currently has a cumulative balance of $215,000 since 2017 [that] have never been resolved during previous audits. Additional spending on surrogates, purchased services including personal care attendants, professional services, other services, bus attendants, and maintenance contracts for plumbing and HVAC resulted in higher spending than expected at the end of the year.
The memo went on to say that items such as transportation, electricity and daycare supplies were also higher than expected.
In response to the school department reporting in March that there was more than $1 million in the red for the 2022 fiscal year, the city council, in an unprecedented move, ordered the city’s finance office to oversee school department expenses until the audit is complete. Under the agreement, any expenditure made by the district must first be approved by financial director Marc Tanguay.
The financial takeover was part of budget negotiations between school and city leaders that ultimately led to the passage of the fiscal year 2023 budget in July, which included a 4% increase in appropriations to the school department, the largest authorized by state law. However, to fill the district’s budget shortfall, the city council circumvented the funding cap by setting aside two separate pots of money, including a “contingency fund” of $500,000. . . for unexpected and unforeseen items,” according to a press release issued after the budget was passed.
And now, with classes starting and with little wiggle room, the school board has voted to tap into those extra funds by authorizing the use of the council-approved $500,000 contingency fund for the school budget. current year. The money will be used to supplement the salaries of substitute teachers, bus monitors and third-party personal assistants who work in behavioral support and special education, which had been overspent by more than $200,000. Expenses still need to be finally approved by the city council.
The school committee also approved the use of $200,000 set aside by the city council for athletics and arts programs. This money has been restricted to these efforts and must go through a review process to ensure it complies with federal Title IX rules, one of which requires gender equity in the funding of sports programs. , said Kraeger.
The school department will present a list of priorities that could be addressed with the $200,000 fund for approval to city council. The school department also received comments from the Middletown Athletic Boosters organization. Some of the money could also be used to expand the choir and music program, Kraeger said.
School committee and school department leaders will attend the next city council meeting on Sept. 6 “to review the deficit and review what we’re doing about it, and then how we’re moving forward,” Kraeger said.
Addressing the deficit at the meeting, school board member Liana Ferreira-Fenton reiterated her longstanding assertion that many of the fiscal issues facing the school department stem from mandates from the Rhode Island Department of Education. . “They keep saying, ‘You don’t need this,'” she said. “But we do.”
“The deficit didn’t happen overnight,” Spengler said. “We have been talking about it for over 12 years. Our expenses have increased and our appropriations have decreased.
In a follow-up conversation, Kraeger said she plans to meet with finance officials in the coming days to amend the district’s deficit reduction plan.
“We reconcile everything and will have a report [for the council on Sept. 6],” she says. “[We plan] to identify any areas where we have under-budgeted or exceeded our spending. »