New London - The city's schools ended fiscal year 2013 with a total unaudited fund balance of $475,966, a surplus equal to 1.2 percent of the total budget, according to a status report the Board of Education received Thursday night.

Steven Adamowski, the state-appointed special master for New London schools, said he's recommending the board establish a "non-lapsing" account with the surplus funds from last year's $39.9 million budget.

School districts are required by law to return any surplus to the municipality, but historically, schools in Connecticut tend to spend all their money in the last few weeks of the fiscal year, Adamowski said.

"I think it will be very helpful, without it we're just hanging in limbo," school board Chairwoman Margaret Curtin said. "Now, we'll be able to keep the money for a rainy day. We should have done it a long time ago."

Curtin said she believes the entire board is in favor of the account, but the board has to work with the City Council to formally establish it before drawing upon the funds.

"I'm going to be following up with the council on it," Adamowski said Thursday. "They responded positively to the idea when we presented it to them, so I'm going to ask them to formalize that in the next month or so."

The non-lapsing account, which the state now allows under legislation passed in 2011, can include up to 1 percent of the total budget and could be used to pay for unexpected maintenance repairs.

Last year, when one of two boilers at Bennie Dover Jackson Middle School failed, the school district and the city had a difficult time trying to come up with money to make the repairs.

It was several weeks before the two governing bodies agreed on the repair bill and how to pay for it. Eventually, the City Council approved a $10,000 expenditure from a previous appropriation for the repairs, The Day reported.

"The purpose of this account is to use the funds to maintain the school buildings," Maria Z. Whalen, the district's director of business and finance, wrote in a Sept. 19 memo to the school board's finance and audit committee. "The funds are to be used for maintenance expenses that ... are for repairs which the state considers minor in nature and below the bonding threshold."

The actual amount of money in the non-lapsing account is likely to be around $300,000 after the year-end audit is completed, Adamowski said.

c.young@theday.com