Budget problems force layoff of 17 workers in SAU 31

Posted Nov. 04, 2011, at 6:19 p.m.

HOWLAND, Maine — Good news from the Maine Municipal Bond Bank late next week would eliminate the need for more layoffs at SAU 31 after faulty budget practices and insufficient board oversight caused a $1.2 million budget deficit that forced the layoff of 17 school workers, officials said Friday.

The school district, which serves Burlington, Edinburg, Enfield, Howland, Maxfield and Passadumkeag, seeks a $1.1 million bond to cover debt and some ongoing expenses left after the $700,000 savings created by the recent layoff of the 14 education techs and three maintenance workers plus other cuts, Superintendent Michael Wright said.

“I have described this as a process,” Wright said Friday. “We had to do something to stay operational month to month. I don’t know [whether further layoffs are likely]. I would not rule it out, but we are looking toward several financial institutions and hoping that they will be able to help.”

School leaders have approached several potential lenders besides the bond bank, and while none appear willing to grant SAU 31 a loan or bond for the entire deficit, some have indicated a willingness to help the district with the $450,000 tax anticipation note the district draws annually to help it cover expenses, Wright said.

Others have signaled possibly giving smaller loans — good news if Maine Municipal opts to reject the bond request, Wright said. A bond bank response could come late next week.

Wright discovered the budgeting and accounting problems shortly after his SAU 41, the former School Administrative District 41, consolidated with the former SAD 31 on July 1. A subsequent, careful review of SAU 31’s records revealed, he said, that school leaders gradually had created the deficit by projecting revenues from undesignated fund balances that never actually occurred.

Wright also learned, he said, that accounts thought to have surpluses actually carried deficits.

Some school leaders blamed administrations prior to that of retired Superintendent Jerry White and individual workers for the problems that led to the deficit, but Wright said audits showed that for several years there were failures to balance accounts, inaccurate and incomplete record-keeping and weak internal controls over financial reporting.

Wright said, and board Chairman John Neel agreed, that lax school board oversight also contributed to the problem.

Leaders from several SAU 31 towns have also made known their displeasure with the quality of board oversight during White’s administration during two public meetings held since Wright discovered the mismanagement.

No one wanted the layoffs, which came about two weeks ago, Wright said. The ed tech loss places a greater burden on teachers and deprives students of some help, while the loss of custodians risks increased degradation of school buildings.

But the layoffs prevented a sudden, sizable tax increase for the host towns and school staff seemed to accept the need for them, Wright said.

“It has been a difficult period,” Wright said, “but a lot of people have given me very good suggestions. People want to know what they can do to help, and for the most part, people realize that we are going to have to take on some debt to deal with this.”

The board of directors, residents who attend a districtwide board meeting and a special districtwide referendum would have to approve of the $1.1 million bond before it could be accepted, Wright said. No dates have been set.

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