Groton ― Following a couple of rough budget years and recommendations from an annual audit, the Town Council has agreed to hire a firm to conduct an operational review of the school board’s finances for the past two years.

Town Manager John Burt said the audit of the 2022-23 budget suggested a review of policies and procedures of current financial controls for the Board of Education.

Burt said the $75,000 operational review should flag any past issues and help determine better processes.

“Hopefully, the review will provide good information for the Board of Education to help avoid future budget issues, as well as provide piece of mind to the BOE and the Town Council that we are operating efficiently and to continue being good stewards of people’s tax dollars,” he added.

Burt said he hopes to hire the firm by December and have the study done in six months. The study will include a review of the school board’s accounting procedures, the town finance department’s procedures as they relate to the school system, and an examination of the board’s records and financial reports to determine if expenditures stayed within budgeted amounts.

The Board of Education on Monday invited the Town Council to work collaboratively to set the scope and process of the review with input from the superintendent, town manager and staff.

“Speaking for myself alone, the town and board received the results of the routine annual audit for last year and while it was clean, as with many audits, there were recommendations,” Board of Education Chair Jay Weitlauf said in a statement. “One was for a review of financial controls. While the board could have contracted for our own review, I personally believe that a benefit of partnering with the town is that the review could also study how the board and town finance departments interact so that policies and procedures achieve the goal of best practice.”

At Monday’s Board of Education meeting, member Matthew Shulman said an operational audit would help the board respond to the financial stresses faced by public school districts across the country, including the lingering effects of the COVID-19 pandemic on students’ social development and academic performance, the loss of staffing positions with the end of coronavirus relief funding, and inflation.

It also would help with Groton’s specific challenges, including the loss of its last assistant superintendent and several business managers, and the need to upgrade its account reporting to a system compatible with town accounting.

Some councilors on Tuesday favored giving school officials until December to continue their work to implement new policies and procedures and show their financial house is in order. But the majority favored proceeding with the review.

“We are taking this not as punitive,” Councilor Jill Rusk said. “I don’t see it as being something that we are telling the Board of Ed, ‘you are doing this wrong.’ We’re taking this as a learning experience.”

Auditor’s recommendations

At a July 9 Town Council Committee of the Whole meeting, CliftonLarsonAllen LLP presented the findings of the town’s annual audit for 2022-23, which includes town and school spending. According to the executive summary, the auditor did not find any problems with the financial statement.

CliftonLarsonAllen LLP also issued recommendations. The auditor noted in the 2022-23 annual audit process that a “significant amount” of school expenditures were recorded to the incorrect budget year, though the town caught the issue so the board did not exceed its budget.

The auditor also noted school officials delayed the recording of special revenue funds, particularly within Board of Education grants, Department of Defense and school lunch funds.

It recommended the school board review its policies and procedures and update them.

The auditor’s report notes that the Board of Education’s financial closing process was delayed for months, which caused the audit to be filed late with the state, “primarily due to turnover within the Finance Department and various employee absences.” The letter notes that staff turnover can cause delays as it can be time consuming to regain institutional knowledge.

The auditor recommended the school board implement formal procedures with deadlines to close out the budget with adequate staffing and review. The auditor also recommended training a second person, to close out the budget in case the primary person becomes unavailable.

Superintendent of Schools Susan Austin said the audit was late because the auditor was asking for more items. In addition, she said the district has had turnover with three business managers in one year, the latest being David Fleig, who resigned in May.

She said the interim business manager, Raymond Engle, is working on the recommendations of the audit and a new business manager, Irene Lynch, has been hired.

Austin said the school board has been able to resolve all the expenditure issues cited in the audit.

k.drelich@theday.com