CLAREMONT — City Council members are joining a chorus of voices in the community seeking answers and accountability in response to the School District’s financial crisis.
School Board member Candace Crawford shed some light on the origins of the financial problems with a presentation to the council during a special meeting on Tuesday.
She traced the problem to 2016 when the “annual audit process began to fall into delinquency” following the retirement of longtime business administrator Allen Damren.
“In 2016, audits were deferred by the then school administration,” said Crawford, who was elected to the School Board in 2023. “That is to say, the audit firm was not invited in to complete the work.”
Audits were not completed in 2016, 2017 and 2018.
At the time, Middleton McGoodwin was the superintendent and Michael O’Neill was the business administrator. The board voted to oust McGoodwin in 2018. In 2019, officials blamed O’Neill for Internal Revenue Service fines the district faced as a result of failing to comply with certain requirements of the Affordable Care Act.
In 2019, Superintendent Mike Tempesta, who was hired that year to replace McGoodwin, resumed the audit process, but it had to begin with 2016 and it has taken years to catch up.
The 2016 audit was presented to the school administration 2019. Eventually audits were finished through the 20-21 school year. Deficits in 2020 and 2021 were a combined $2 million, the administration announced in the spring. However, the ’22 audit showed a surplus that “cleared the deficit,” according to a PowerPoint presentation at the Wednesday School Board meeting
Officials are now awaiting audits for ’23, ’24 and ’25, and until they are complete, the true state of the district’s finances won’t be known.
Matt Angell, who was hired last month as comptroller and later as acting business administrator, has found about $5 million in “outstanding, overdue invoices and liabilities,” according to the School Board presentation.
Other factors contributing to the deficit included federal grant reimbursement being temporarily suspended last December because of noncompliance issues and a fund balance error that set last year’s local school tax rate too low.
Furthermore, the auditor said in August district officials failed to provide required information and that has been an ongoing challenge.
A forensic audit, which would be a deeper dive into the finances and the causes of the deficit, has been suggested by some residents and O’Shaughnessy. The School Board will decide later if it wants to pursue that course of action.
‘How everything was missed’
At the City Council meeting on Tuesday, Crawford and the council debated who holds responsibility for the school district’s current crisis.
Trying to explain why audits were not done for three years, Crawford said it is the administration’s responsibility to initiate an audit by contacting the audit firm.
“The school administration coordinates with the auditing firm to provide documents to do the audit,” Crawford said.
But Assistant Mayor Deb Matteau said the School Board did not fulfill its responsibility either.
“You go three years before anyone realizes that (audits) didn’t happen,” Matteau said, adding she was not blaming Crawford personally. “To me that is a failure at the board level for not saying to the administration, ‘Where is my audit?’ ”
Crawford said the School Board operates at the “mercy” of the administration when it comes to financial information and it is easy for the board to get “sidetracked.”
During public comment at the council meeting, resident Julie Hilliard said she heard a lot of excuses about why the audits were not done but no real answers.
“I fail to see how everything was missed,” Hilliard said. “How you miss it year after year is beyond me.”
Crawford said the board has approved a policy requiring annual audits.
“We can’t undo the past but we are trying to be responsible,” she said.
City Council willing to help
After Crawford informed the council of the School Board’s plans to obtain a $4 million bank loan, councilors decided to delay action on a request to release school tax payments early to help the school district ease its current cash flow crisis.
The council also did not vote on requests to forgive the $30,000 the city bills for school use of the athletic fields or the $68,860 the school district pays for the school resource officer, who is employed by the Police Department.
“The urgency of last week is off the table, but not completely,” Crawford told the council. “The short-term loan will cover some of our issues so we don’t need it (tax payment) right now.”
At its meeting Tuesday, the City Council made it clear that holding off on the district’s request was not to suggest the city did not want to assist the school district.
But with the bank loan pending, the council thought it made more sense to wait until Angell presents more details on the school’s financial situation in about a month.
Councilor Brian Zutter said waiting until there is more financial information is a more fiscally prudent approach.
“We will know where we are and where we can help,” Zutter said.
Councilor Wayne Hemingway said the council is willing to help to ensure there are school sports, a school resource officer and the schools are kept open.
“We are willing to do it,” he said.