Audit committee presses for school district finance records
Published 11:02 am, Wednesday, August 19, 2015
New Canaan’s Audit Committee wants town finance officials to have full access to the Board of Education’s financial books to provide more checks and balances to ensure money is being spent appropriately.
The issue of open access to the school district finance records dominated a meeting of the committee two weeks ago as it discussed concerns about a trio of whistleblower complaints about Board of Education contracts and a policy offering free tuition to children of out-of-town New Canaan school faculty.
Audit Committee Chairman Bill Parrett said the body wants town finance officials to have “unfettered access” to the school district’s accounting records to check contracts and other transactions to raise questions if necessary.
The access would likely include the town’s chief financial officer, the town’s external auditor, and most likely the first selectman, the committee members said.
“What concerns me is that people are being taxed and there is a total disconnect between the people being taxed and the people spending the money,” Parrett said.
The whistleblower, Michael Nowacki, a town resident, submitted complaints to the committee about three issues — a new employment contract between the Board of Education and the district’s new director of finance, Dr. JoAnne Keating, financial issues related to the tuition-free education as an employee benefit, and the process of obtaining financial background on the board’s annual budget requests.
Concerns were raised by a “side letter” of the contract that called for “continuing income,” for Keating, a term that was not clear to the committee. Town of New Canaan Finance Director Dawn Norton said the pension benefit terms in the contract were calculated incorrectly by factoring other extras beyond base pay, and “about double what they should be.”
“It is not a good contract and it is not well-drafted,” committee member Ed Kangas said. “I think the answer is that nobody at the town saw it.”
Another concern the committee had was getting a better understanding of NCPS teachers receiving free educations for their out-of-town children. Most neighboring towns in New Canaan’s demographic resource group do charge teachers some percentage of the cost to educate their children.
The town has allowed the children of non-resident teachers to attend New Canaan schools tuition free since 1956 at the discretion of district officials. The policy is similar to other schools in New Canaan’s Demographic Reference Group, including Westport, Wilton and Ridgefield. A discussion of the policy was spurred this summer about whether the town would be justified in charging teachers some percentage of the tuition during debates about a planned expansion of Saxe Middle School. District officials believe the policy allows them to attract higher-quality teachers and administrators.
“I would say the policy is probably not well known and I would say most people I talk to had never thought about should we or shouldn’t we charge them,” Parrett said.
The committee expressed a general concern about the ability of the town’s finance director and staff to access documents and supporting financial material to understand fully how the board is spending tax money.
When Parrett asked Norton about efforts to expand the extent the town and Board of Education integrate services, including buying insurance and information technology, Norton said the Board of Education had not moved to work on the issues with the town.
Norton said the town prepared a specific proposal discussing ways to share services, but an attorney for the Board of Education sent a reply indicating the board wasn’t required to work on the issue.
“That isn’t a way to run a $140 million budget,” Parrett said.
“Does the Board of Education understand the consequences of not cooperating?,” Kangas said. “This is going to get fixed or you’re going to read about it in all the newspapers including, The Wall Street Journal, about the fraud in this town.”
The issue is can the town’s finance staff feel comfortable signing off on the school board’s budget without clear access to records to substantiate spending, Walbert said.
“In the past three or four years, we’ve gotten much more transparent reports from the Board of Education with most reports having all the numbers you could possibly want,” Walbert said. “The question is that Dawn Norton would like to be able to look at things without asking them. I think they are working on something that is getting closer and closer to something we can all agree with.”