December 4, 2013

Winthrop officials continue spat over school funds

Tension between municipal and school officials has mounted since June, when an auditor flagged problems with school spending accounts.

By Craig Crosby ccrosby@centralmaine.com
Staff Writer

WINTHROP — The Town Council and the School Board appear as far apart as ever when it comes to an agreement on a new school budget.

While there are multiple areas of dispute, including the structure of health insurance coverage for school employees and creation of policies to regulate third-party bank accounts, the crux of Monday’s council debate was control of nearly $70,000 left over in high school student accounts.

Both sides agree on one thing: The money, or at least most of it, eventually will be given to the town. It’s just a matter of how it gets there.

“Sixty-nine thousand dollars should be returned to the school coffers, which in turn will reduce the deficit and repay the town coffers,” town auditor Ron Smith said. “I really think you guys are complicating it.”

The protracted debate at times turned heated as both sides argued for their right to control the money and questions arose about how the school board wound up with such steep deficits in summer salaries and food service. Tensions peaked when School Board member Isaac Dyer claimed Council Chairman Kevin Cookson’s effort to stall the budget process has been “vindictive” and accused of Cookson of spreading “innuendo” and “threatening” school board members with criminal prosecution.

Cookson, in turn, criticized board members for prematurely “publishing articles” claiming there were no illegalities or malfeasance regarding the problem school accounts during the course of an ongoing criminal investigation. Cookson declined to elaborate on that investigation, but said it is incomplete and involves one of the problem accounts identified in a special auditor’s report earlier this year.

Tension between municipal and school officials has mounted since June, when an auditor flagged problems with the school spending accounts. Town councilors froze the accounts to prevent spending without council approval.

Councilors in July rejected the school board’s 2013-14 budget proposal, which was about $500 less than the 2012-13 budget. Councilors said they could not approve a budget until they receive the auditor’s final report, a stance Smith has supported. In the meantime, the school system is operating on a 2012-13 school budget; but Gary Rosenthal, superintendent of Alternative Organizational Structure 97, has limited spending to essential items until a new budget is passed.

In October, Smith delivered a report that identified several problems in the town’s finances, including deficits in school spending, infrequent account reconciliations, checks not appearing on Town Council warrants and 22 third-party bank accounts with the town’s tax identification number on them.

Smith said at the time the lax accounting practices, particularly the outside accounts, created opportunities for abuse. No allegations of wrongdoing have emerged from Smith’s audit.

The town and the School Board have worked to correct the problems identified in Smith’s report. Rosenthal on Monday presented a budget that closely mirrored the original version crafted in June, hoping this time councilors would pass it along for voter approval. That did not happen.

“We’ve made all the changes and adjustments everyone asked us to make,” Rosenthal said. “I really believe we’re ready to move forward with this budget.”

There was little discussion about the overall budget, however. Debate instead focused on the nearly $70,000 left over in the student accounts, and other accounts, some of which was fronted by the town.

The school system over a number of years has borrowed a total of $645,000 from the town to pay summer salaries and deficits in the lunch program. The school board wants to take $60,000 of the $70,000 left over in student activity accounts and pay down that debt. The remaining money would be put into a contingency fund to take care of athletic fields, all of which are in great need of maintenance, Rosenthal said.

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