Will state help cure deficit?

By Ron Leir
Observer Correspondent 


The state Department of Education has assigned a monitor to oversee the Belleville Board of Education’s fiscal operations.

Thomas Egan, a former IRS employee who has worked the last 18 years as a school business administrator in Bergenfield and Garfield, will have oversight power over all spending and hiring in the Belleville school district.

Egan, who has also been monitoring the Elmwood Park school district since January 2013, arrived in Belleville May 13 and was introduced to the school board members at their May 14 meeting.

Egan told The Observer he’s in Belleville for two reasons: first, because the annual audit of the district for the fiscal year ending June 30, 2013, compiled by McEnerney, Brady & Co. CPAs of Livingston, “found areas of concern – for example, proper accounting procedures were not being followed for all grant programs ….” and secondly, because “the district notified the executive county superintendent (Joseph Zarro) that it faced a substantial deficit.” School officials have estimated that the deficit could be as much as $2.5 million.

“These two facts combined automatically initiated my being here,” Egan said.

As part of their report to the district, the auditors had this observation: “It was noted during our engagement that management prepared cash flow projections for the District year 2013-2014.

These projections indicated the potential for liquidity issues for the period ending June 30, 2014.” The auditors recommended “that management monitor cash flows and develop a plan to address any potential issues.”

Egan anticipates spending 20 hours a week in Belleville and 20 hours a week in Elmwood Park, “depending on the workload.” The oneyear contract he signed with the state calls for him to be paid $96 an hour for up to 20 hours a week.

While he’s in the district, Egan said, “I have final approval on all expenses.”

As a way of familiarizing himself with the district’s operations, Egan said he’ll be “reviewing all financial and personnel records to get an understanding of the district’s needs.”

Egan said he’ll be undertaking that review with the help of central staff, including Schools Superintendent Helene Feldman and Interim Business Administrator Raymond Jacobus. “I’m not here to solve the problem by myself,” he said.

Actually, one important decision – one option for making up the apparent deficit – has already been made, according to Egan. “There won’t be a referendum to ask the taxpayers for more money,” he asserted. Asked how the board would get the cash, he declined to say.

The board’s school budget for 2014-2015 stands at $62.6 million, of which $36.2 million is to be raised through local taxation.

In the meantime, Feldman said she’s “put a freeze on all [school] accounts.” So far, she said, the board has been able to meet payroll and pay vendors and is planning to proceed with all necessary hirings for the upcoming school year. For example, she noted, “There will be fall [athletic] coaches.”

Egan said he plans to share his mission with other stakeholders in the school community by scheduling a “Meet the Monitor” session with the public during the week of June 9. Once a time and place are firmed up, he plans to arrange to publicize the event through the district website and local press.

Egan said he feels it’s important to spread the word through the community about what his task involves, so “the more people that come, the better.”

He said he also plans to meet separately with unions representing district employees.

Egan said his overarching guide in making decisions in tandem with district officials will be “how is this going to affect the students?”

At the May 14 school board meeting, the board passed a resolution “acknowledg[ing] that the [Morristown] firm of Schenck, Price, Smith & King attorneys at law … will represent Thomas Egan, state monitor, for any legal matters that relate to his official duties as state monitor.”

Asked about that move, Egan said that he’ll rely on the firm’s legal expertise – “since I’m not a lawyer” – if he finds himself in a disagreement with Belleville school officials in the interpretation or application of state school statutes. “This way, I can go get a second opinion,” he added.

But on the basis of his experience thus far, Egan said he didn’t expect that to happen. “Since I’ve been in Elmwood Park,” he said, “I’ve never had to use an attorney.”

Among the auditors’ findings were these:

• That the district issue  purchase orders before purchasing goods or services and that they be signed by vendors.

• That the district obtain  political contribution disclosure forms from vendors.

• That the district promptly remove terminated employees from the health bill.

• That the district ensure  that purchases made with Title I funds be used only for Title I purposes and not for professional development.

• That the district stop  using Title II funds for the payment of association dues for principals and the district reimburse the grant program for $12,800.

• That the district reimburse $22,227 for equipment purchases to the Carl D. Perkins grant program “since it does not appear that it has been received as of Nov. 15, 2013” and that the district establish Perkins grant award advisory boards as required by law.

• That sales tax should not  be paid on purchases made by teachers running the student activity account.

• That the athletic department maintain a summary of gate receipts collections and an inventory of game tickets issued for each athletic event and a reconciliation be done after each game where the collections are matched to the number of tickets issued and that all gate receipts collectors must sign off on the turnover.

• That the district review  the enrollment documentation and accurately reflect that information on the report submitted to the state.

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