Members of the City Council and School Committee sat down with Business Manager Stacey Busby, Finance Director Thomas Bruce, Mayor Leo Fontaine and Principal Robert Civetti from the accounting firm Braver PC Thursday night for a meeting to address an estimated $2.1-$2.7 million in overspending for education during the fiscal year that ended this June.
The culprits Busby named behind the sudden and previously unexplained shortfall during the three and a half hour meeting included former employees, an understatement in the line item for healthcare, confusion as to which accounts were to be included in the total, and salaries for recently hired employees.
According to a draft statement prepared by Civetti, the department overspent by $2,045,580 for education salaries alone, creating a deficit which is likely to result in a lowered bond rating for Woonsocket and the surrender of at least some of the city's fiscal controls. The findings were nearly identical to predictions made by auditors last May, but Civetti adjusted the report after Busby disputed the deficit, and claimed a surplus for 2011's education spending.
Busby told officials that she did not spot the defiicit until she rolled in all of the appropriate accounts and examined the line item for healthcare, noticing the understatement, actions which, after questioning from Fontaine, she said had not been completed until this past Wednesday night.
"I guess that we are in agreement with all of the numbers now, and we're confident that the number will be between $2.1 and $2.7" million, Fontaine said. "There was $1 million quoted in one of the papers that you felt the deficit was down to and then last night, it was indicated to me that it was down to $745,000. I'm just wondering where those numbers came from if now we all agree that it is up over $2 million."
Busby replied that certain accounts that traditionally were kept in a separate budget from the department's operating numbers were not calculated into her total. "Historically, Woonsocket never added the vocational or enterprise fund," she explained.
"We only found that out last night?" Fontaine asked.
"I was going back and forth with Bob [Civetti] as to whether or not we were going to roll it in," answered Busby. "It was always separate, but they decided to roll it all in together."
Busby also cited the extensive process of correcting errors made by a former employee as an one explanation for delayed reporting to auditors. City administrators had been told for months that the department had completed the year with a surplus before receiving Civetti's findings on Monday.
"There were some personnel issues. I identified them and took corrective action," Busby said. The only other accountant employed by WED, Kristen Howe, was let go in September.
That employee, and former Superintendent Robert Gerardi were largely blamed for WED's current shortfall throughout the three and a half hour meeting, in which Busby, Superintendent Giovanna Donoyon and Civetti presented a united front against questions fired from Fontaine and others seeking an explanation for the debt and the department's slow recognition of the problem.
The overspending on salaries, Busby explained, was the result of several new hires recommended by Gerardi and approved by the School Committee before the former superintendent's departure last June.
"I can advise, but I do not have oversight," she said. "Part of the problem for fiscal year 2011 is adding positions when it's not budgeted. Since Dr. Donoyon has come in, she has heard my voice when I say there's no money."
Although the department cut 51 positions this year, at least 10 new salaries were added to the department's expenses, including several for instructional leaders, highly trained special education teachers that Gerardi pushed through before his departure.
Busby said that she felt she would be overstepping her role if she brought the overspending to the attention of members of the School Committee, who ultimately approved the hires.
"They approve positions on the information and recommendation of the superintendent." said Busby. "It's not my place, because I have a boss too, to say 'hey wait a minute, there's no money'. I don't believe professionally that it would have been right to overstep the boundaries. I am not the academia person, I am the financial person."
Visit Woonsocket Patch this weekend for more on this discussion and outcome of this important meeting, including information on the city's credit rating, reports on the status of the current year's budget, potential solutions for the department's reporting problems, and the more on the dilemma faced by administrators struggling to stay within budget while trying to meet the state's Basic Education Program. This complex issue will require numerous follow-ups.