After Mayor Mark Lauretti last week raised concerns about the Board of Education budget practices, the city’s independent auditor met with leaders Tuesday to explain the city’s budget audit.
David Cappelletti, of the accounting firm Levitsky and Berney, met with members of the Board of Aldermen’s finance committee to talk accounting practices, including school spending on “office furniture.”
The latter was one of Lauretti’s concerns after he viewed the city’s audit for the 2009 – 2010 fiscal year.
Lauretti last week called out the Board of Education for spending $25,000 on “office furniture,” which Lauretti presumed was for Superintendent Freeman Burr’s office.
It turns out the $25,000 — although listed under an account labeled “superintendent” — was used for library equipment at the Perry Hill School. That’s how Cappelletti explained the purchase Tuesday evening when Board of Aldermen president John Anglace asked him about it.
“What are you supposed to interpret that as?” Lauretti said after the meeting Tuesday night, acknowledging that he had been in the superintendent’s office and had not seen new furniture.
Burr was not present at the meeting. The school finance director, Al Cameron, who was at the meeting, deferred all comment on the budget audit to Burr.
Different Strokes
The main discussion Tuesday was about the different ways the city and the Board of Education list their encumbrances — or outstanding payments.
For many purchases, the Board of Education issues purchase orders, then waits until later in the fiscal year to pay them, Cappelletti said.
The city, on the other hand, looks at its money as it goes along and issues purchase orders and pays accordingly, Cappelletti said.
Some of those bills — on both the city and the school sides — aren’t paid out until after the fiscal year ends.
Both practices are acceptable, Cappelletti said.
“I think the city and the Board of Education each works consistently in their way,” Cappelletti said. “They’re just not the same (way).”
Concern
But those differences in accounting methods “lead to a lot of open-ended questions,” Anglace said.
When Lauretti received the audit statement, he said he was concerned with how much money the Board of Education had to pay out after the fiscal year.
On June 30, 2010, the Board of Education had about $877,986 in outstanding bills to pay for that fiscal year.
By Dec. 15, the Board of Education still had to pay $70,000 of that figure, Cappelletti said.
The auditor said he had not received purchase orders indicating what the $70,000 was set aside for.
In contrast, the city had about $429,000 in outstanding payments as of June 30.
Lauretti said his concerns will likely translate to budget time.
“If it takes a year and a half to spend the money, they don’t need that money,” Lauretti said. “These are tough times.”
Shelton Audit Recap
The finance committee also discussed the city’s financial well being during the meeting.
Here’s a break down of the audit report:
- Fund balance = $9.2 million. That’s about $1 million more than last year.
- About $4.3 million of that fund balance is considered “unrestricted,” meaning not allocated for projects, and available to use as needed.
- Cappelletti said the city’s fund balance is at recommended rates of between 8 and 10 percent of the total budget.
- The city’s tax collection rate in 2009 – 2010 was 98.8 percent.
- The city had a budget surplus. City departments returned 11.2 percent, or about $5.3 million to the general fund at the end of the year.
