An earlier proclamation by school officials that the school district ended the last fiscal year with a $130,000 surplus was wrong, Cranston Mayor Allan W. Fung said in a blistering press release that lambasted the School Committee for making "empty promises."
Now, facing a $270,000 deficit due to lower-than-expected Medicaid reimbursements, Fung said the School Committee "placed political grandstanding ahead of being truthful with taxpayers."
in a joint statement by School Committee Chairwoman Andrea Iannazzi and Vice Chairman Frank S. Lombard along with a pledge to use the money to help pay down the district's debt to the city.
Fung said it was irresponsible for school committee members to make the announcement when the final numbers weren't fully audited and said "Iannazzi was speaking with numbers that were unaudited and promising to write checks that the schools clearly did not have," noting the audit would be completed after the election.
"The taxpayers and also the ratings agencies depend on the city and the school department to present accurate and truthful positions on the financial status of our city as a whole," Fung said. " Statements like this from School Committee Chairperson Iannazzi and her allies erode public trust in Cranston’s elected officials.”
Iannazzi said that the School Committee did vote to return roughly $131,000 to the City. Afterwards, when the School CFO Joseph Balducci approached the City's Finance Director, Bob Strom, to discuss the payment, Strom "recommended that the Schools hold on to the payment until the audit was complete."
"During the audit process, it came to Joseph Balducci's attention that there were Medicaid receipts that were not received from the 2009-2010 and 2010-2011 school years. As part of the 2011-2012 audit, an issue regarding prior year receivables was discussed with the auditors. This matter will be addressed on Wednesday, when Mr. Balducci and Mr. Strom meet with the City's auditors. We will follow any and all recommendations made to the District by the internal auditors," Iannazzi said.
The School Committee has taken numerous steps to hold the line on expenses, negotiating in excess of $8 million in savings through collective bargaining agreements," Iannazzi said. "We will continue to exercise fiscal restraint and advocate for Cranston's taxpayers."
Fung said "this type of irresponsible behavior continues a long standing practice of poor financial judgment by the School Committee going back to the Caruolo action of 2008, when Superior Court Judge Savage determined that “the Cranston School Committee has been unable to properly forecast and account of its expenses” and that it suffers from “poor budgeting and accounting practices.”
The bad financial news comes on the heels of last week's revelation that the after a slew of unexpected special education placements early in the school year.