Murray says school leaders hid surplus

Murray says school leaders hid surplus

Salvatore demands apology, cites ‘serious concerns’ with mayor

CUMBERLAND – Mayor Bill Murray is accusing school officials of intentionally hiding a $313,514 budget surplus for last year.

The mayor says that for at least part of that amount, Business Manager Alex Prignano was instructed by the School Committee not to show the money as surplus. He theorizes that school officials feared town leaders would take the money back in this year’s budget if they knew about the surplus.

School officials are denying the accusation.

“First and foremost, it is not true that the business manager was instructed by the School Committee to hide $313,000 in surplus,” said Supt. Bob Mitchell. “No one associated with the School Department would ever suggest anything like that.”

Mitchell said by email that he and School Business Manager Alex Prignano called Town Finance Director Jason Parmelee about the accusation and Parmelee described to them what he sees as an “accounting issue.”

School Committee Chairman Raymond Salvatore is also rejecting the assertion, demanding a public apology from the mayor.

Prignano did not return calls for comment.

Salvatore on Tuesday said the mayor’s email was “convoluted” and “ridiculous.” He said no one ever told anyone in the School Department how to handle the accounting.

“There’s zero proof whatsoever,” he said.

Salvatore added that he has “serious concerns about the mayor,” particularly about “what he’s trying to do” and “who he might be trying to align himself with in Town Hall.”

He said Murray should focus on building relationships with the Town Council, a board he hailed for its work to increase school funding.

Parmelee said he won’t disagree with Murray’s assertion that school officials are trying to hide a surplus, but said he personally would probably refer to it as an “accounting trick.”

“It’s a choice of presentation that the schools made,” he said. “It’s an accounting position that they took.”

This was “no error or fraud,” he said, but simply a decision to budget using revenue sources that they never used.

“They didn’t perpetrate anything or commit any fraud or anything,” he said.

Parmelee said that though the audit report shows a budget surplus of zero, school officials chose not to record three items that were budgeted as revenues. One item was a transfer from food service for $30,600, another was a transfer from literacy for $146,206, and the third one was $136,708 less in reserves. If all of these revenue sources were accounted for differently, he said, the schools would have shown a $313,514 budget surplus.

Murray, in an email to the Town Council after its meeting last Wednesday, said it was “extremely surprising” to him and others that when the town’s audit report was presented last Wednesday, Feb. 7, the council made no comments or questions after it was pointed out that the $313,000 wasn’t shown as a surplus.

If the schools drew the revenue transfers, said Murray, their bottom line surplus would have increased by the $176,806, from $2,949,406 to $3,126,212.

The controversy over the claimed lack of a surplus, ongoing questions over a $121,000 payout to former Cumberland High School Principal Donna Charlton, as well as multiple special committees studying school finances, all promise to play roles in upcoming budget talks between the town and its schools. Murray has said he’s not inclined to give the schools anywhere near the $2.3 million bump they received last year.

School officials never took the money from literacy and school lunch accounts because they didn’t need it to balance their budget, said Parmelee. Other major areas of the budget have continued to run in the black, he noted.

The money is still sitting in other funds instead of going to the schools’ unrestricted fund, where it would show as a budget surplus, said Parmelee. Money for literacy is sitting in an account named “special revenue literacy,” he said.

Schools budgeted to use the money, but haven’t needed it.

“It’s all an accounting presentation,” said Parmelee, adding that his past experience with municipal audits help him see such maneuvers easily.

When a school department is facing a $1 million deficit in October, as local schools were in the fiscal year ending last June, and then ends the year with a $300,000 surplus, “a lot more questions are asked” than if the end-of-year surplus shows zero, said Parmelee.

Comments

They need that for the severance pay in case someone else leaves .HUGE JOKE !

I am not surprised at all. Cumberland's school dept. has never been able to run their schools correctly. They put up a big show and say "it's for the kids, we need money". Baloney! The kids and good teachers we have don't benefit. It goes to big salaries and inadequate management. I want to see how the Town Council big supporters of schools act now. It will always be "somebody else's fault" ... you can bet on it. So, Ms. Beaulieu and Mr. Kane and Mr. Shaw, what are you going to do now? I know what I am going to do. Try and vote them out. WAKE UP CUMBERLAND RESIDENTS.. we're being taxed to death, not by Town Hall, but by the School Dept. The are being sneaky and are not to be trusted. Mr. Salvatore should go and the rest of the crew on the School Committee and Town Council that are in cahoots with him. They cry they have no money, but they have a great surplus plus sneaky accounts and enough money to pay a whole contract that they weren't supposed to pay. VOTE THEM ALL OUT!!!

Someone down at town hall has been smoking something. The town has $1,560,000 million dollars in designated funds and the mayor is having a peeing contest over $146k over designated literacy funds.

Any they did not spend everything in the budget. Both the town and the school committee had a surplus!

Come one here, it is an election year! Don't you get it?

Health care at town hall was $500k over budget for the year. Why is that Mr. Mayor? You have that HSA Plan? Where did that un-budgeted money come from?

Why are you holding over $12 million in surplus when the auditor said it was over what was necessary for a good bond rating? Are we over taxed?

I am sure there is more than this story leads everyone to believe. I watched the town council meeting and the auditors never said they were hiding any money or it was trickery.

Only Mr. Parmalee and Mayor Murray are making noise because of the zone change he wanted.

If everyone out here thinks they can do a better job then get ready in June to declare your intentions to run for office. I know I am going to step up and run.

Murray and Parmalee are off their rockers. If they want to see examples of accounting tricks, they need not look any farther than Parmalee's ill-advised "presentation" to parents during which he tried to compare Cumberland to West Warwick, Coventry, etc. to support the conclusion Murray had told him to make. The school department does the best they can with what they are given, period. Murray is trying to capitalize on some recent bad press coupled with a denial of his pet project, so he is lashing out.

We need a new Mayor... a professional, competent, level-headed and smart leader going forward. I would support ANY of the SC members if they were to challenge Murray's candidacy.

Well I hope and pray that whoever you think should run for mayor from the SC does a better job running the town than hiring a principal.

If the Cumberland School budget could not move monies from line to line that would solve the problem.

The actions of the school committee, both in the handling of the CHS Principal and now the handling of the budget demand a call for full accountability. A simple, “accounting trick?” This is taxpayer money which is hard-earned and we receive demands every year for more from the School Department. There needs to be an independent outside audit so that we may get answers.
Further, I believe that the make-up of the Committee needs to change. There should be a Charter change to remove the two at large members and change to either two members appointed by the Mayor with Council approval, or one each by the Mayor and Town Council. This can add some oversight/input to the Committee that apparently does not now exist.
Voters should consider all of this in the next election and think about voting out the present committee and putting in some new blood. The School Department should consider, and adopt, zero based budgeting in which every expense must be justified. It should be asked: should we be paying for this, why, is it necessary? For example, why spend money for a crossing guard at the high school when there is a pedestrian bridge in place? A small expense in a large budget, perhaps, but how many of these “small expenses” are there and how much to they add up to? Before they ask for more money, they should be able to explain and justify current expenses. Are we getting our money’s worth and is it money well spent? I fear that this year we will again be met with begging and pleading for more dollars for education resulting in yet another tax increase of perhaps 4 %.
These actions should be a wake-up call to all Town residents.

The only people who think there was something wrong with the accounting are Parmelee and his boss, the Mayor. The State doesn’t see an issue, the independent auditor doesn’t see an issue. Just Mr. Parmelee, the same man who had to have Cumberland’s books explained to him by Jeff Mutter because he couldn’t quite figure out how the whole tax collection thing worked.

The Mayor is running for re-election and the arithmetically challenged Parmelee is just trying to keep his boss happy and keep his job by suggesting there’s something wrong with an accounting decision that’s perfectly proper and one which they knew about before the audit, yet never raised concerns about. The schools spent down over $1M of fund balance reserves during the last fiscal year. Maybe that scenario can equate to a surplus in Mr. Parmelee’s mind but in the real world of accounting drawing down reserves (i.e. spending more than your revenues) and running a surplus are mutually exclusive concepts.