The Montclair Public Schools will face a difficult budget cycle this year because of about $2 million in unplanned, but necessary, spending on special education, the district’s financial auditor said at a school board meeting Wednesday.
Auditor Valerie Dolan, of the firm Nisivoccia, also presented a corrective action plan with nine findings – most of which she described as “housekeeping” – in categories ranging from food service to student activity funds.
Dolan told the school board that significant hiring in special education and student placements out of district drove up costs. The district could not have predicted the need for the $2 million in extra spending, she said.
“It’s really going to put you into a difficult position in this next budget cycle,” Dolan said. “You won’t have any surplus to utilize going forward into this next budget, so that’s going to be a hard, difficult process.”
Crafting a Budget
School Business Administrator Christina Hunt is building a budget to help the district regenerate the needed surplus, she said. Dolan indicated Montclair is not alone.
“We audit over 90 school districts and this is common,” she said. “We’ve seen this problem in many districts and usually what it does require to help, is a little bit of a pivot.”
Dolan did not say what that pivot would be. School board members did not ask questions of her during the meeting. School officials did not return Montclair Local’s emailed request seeking clarification on this point Thursday.
In the 2023-24 budget, the district cut 31 teaching positions and 34 paraprofessionals to balance a $5.5 million deficit. The following year, in 2024-25, however, the district staved off staff cuts under a $147 million spending plan that benefited from a 6.4% increase in state aid.
Archive: Audit of Montclair school district in 2021-2022 year finds 7 corrective actions
Auditor’s Findings
The audit, for the year ending June 30, 2024, shows nine recommendations for corrective action, most of which Dolan said the district has addressed or is addressing.
Among the findings:
- The district did not file the required certification of compliance with federal and state law respecting “reporting of compensation for certain employees.”
- The district needs to take greater care when monitoring the budget and recording transactions, including the state aid debit and credit memos to ensure that it does not over-expend appropriation lines.
- The district needs to ensure all revenue/receipts and expenditures are properly recorded. The district must approve board secretary and treasurer’s reports within 60 days.
- The district must obtain county superintendent approval for all required general fund transfers more than 10%.
- The district needs to continue to communicate district-wide standards policies and procedures for all student activity funds.
Food Service Deficit
The audit also found over $300,000 in unpaid lunch monies, according to the report, which said, “This was due to student lunch accounts being charged on accounts and not being collected.”
“The administration will implement a procedure that reviews all open balances bi-monthly for collection or cancellation,” the report says.
The district’s food service fund, Dolan said, had a nearly $80,000 deficit. This is because a federally funded program that provided free lunches during the pandemic ended, she said. Rising food costs along with less participation in the traditional free and reduced lunch program have also been factors, Dolan said.
School board member Brian Fleischer, who chairs the finance committee, said the food service fund has run at a deficit “for as long as any of us can remember.”
“We talked about the overall commitment within the district around not punishing students who come to school whose accounts are over or may not have money,” Fleischer said.
Email reporter Matt Kadosh at matt@montclairlocal.news
Shocked! Montclair parents max’d out their credit cards…again!
I so want to say to the parents I told you so last Spring. OK, I’ll say it, I did tell you so. Nah, nah, nah, nah. And as I said last Spring, if you need any help on budgeting, our CFO will offer to help out with some pointers. You were running almost a $150MM budget and you didn’t think to put in an into cushion? Brilliant! Absolutely brilliant!
School board members did not ask questions of her during the meeting.
Yup. They all knew this was coming and rather than put the BA up there, they had the outside auditor break the news?
The bestest part? The Township Council will be taking $3-5MM out of the municipal surplus to…wait for it…wait…fund the school district’s surplus! Each year the AAA-rated muni side will provide the cushion. It will be like an allowance from the grandparents. How fantastical is this? Actually, it reminds me of the days of appointed school boards and Council approval of school budgets and cap spending. Gone because the parents said they could run things better. They will be where the buck stops. Yup. The grown ups.
Any chance we can get an outside audit? 2 million extra for special Ed? I don’t buy it. How much was spent on lawyers?
Can someone explain why we have over 180 students sent out of district this year? How much does each student cost? The BOE lacks the skills and experience to oversee such a large budget, and the lack of professionalism by the business administrator is not helping.
Not one question or comment from board members? Unbelievable. Doesn’t return questions by the Local? They think they are accountable to no one.
As a retired CPA, the points that the accounting firm outlined, contained in this article, are serious issues. All indicate a lack of control, and an indictment that the BOE is not accountable to the community.
To blow off the school lunch deficit by saying we have always had one, is an attempt at some not logical justification.
The sloppy way our schools are run, never ceases to amaze me.
School Business Administrator Christina Hunt is building a budget to help the district regenerate the needed surplus, she said. Dolan indicated Montclair is not alone. “We audit over 90 school districts and this is common,” she said.
I remember like it was yesterday the BoE, the PTA, key proponents made the “all the other school districts have elected BoE’s” and seem to work well. Montclair’s appointed BoE was cast as a relic of the past held on to by a small group of district laggards. I wish somebody had shared what the auditor’s experience was above about all those Type II districts – and that it would not bring good fiscal stewardship to Montclair Public Schools.
Next is the fascinating high level discussion – that we didn’t get to hear – over just how does one build back an appropriate surplus. To build a surplus above our existing cost of operations and the annual escalators in a budget that is 80% payroll.
Then there is the 100% elected BoE leadership that will emerge in a matter of weeks and months to get us to that good place. Or, all can do what is always done – hack, whack & whine our way to a budget this year and hang any real solutions and hard choices on the new, permanent superintendent this Summer. Seems like a plan.
On November 15, 2010, Shirley Grill (Board Liaison) and Subcommittee Lead
Harvey Susswein made a presentation of their findings on addressing the increasing Special Education (SE) costs to the district. SE costs represented over 25% of the budget then. The title of their presentation: “Income Generator: Insourcing Special Education”. The title gives you the gist of the concept they studied.
The opportunity, if it was even realistic, is almost certainly untenable today. Of course, if we had started small back – invested, learned & grew – maybe we would be having a different conversation now. Maybe if we had started like we have started to build the Pre-K opportunity today (which is being underwritten with State funding, as long as that lasts).
The good news is the district now has a robust Strategic Plan. Created by a mostly elected BoE. We’re covered on the long-term. Just a few kinks this year to work out.
Towntalk. Here’s how it usually goes
BOE – “yes parents, you’re child has special needs and we can provide the assistance in the district”
Parents (with their lawyer). “No thanks we want out of district help”
BOE. – “we cannot do that based on what your child needs and what we can provide”
Parents “Well I guess we’ll have to sue”
BOE. “Sorry you feel that way”
Attorney, Sometime later.” I have great news, we won. I’ll send my bill along”
As a voter, I am looking forward to my fiscal oversight responsibility to the MPSD’s 2025-26 Budget. Maybe this year the 100% elected BoE can grow up and join the adults and require actual budget documents from start to finish – not Powerpoint decks. Seriously, if you want to be treated with a level of respect, you have to be professional in your work. Stop the rinky-dink, 8th Grade PPT financial overviews. If you don’t understand budget docs, hire some tutors. Or not, and just tell us what the bill is. But, you have to know I will harp endlessly on this Council all Spring about their Big Idea to give you guys a chunk of our muni surplus. It’s not the best use of my time, but I can pack a lot into 3 minutes when I am properly motivated.
Oh, come on! Here is the double-speak copy above that says ‘trouble’ buried in auditor lingo.
— The district did not file the required certification of compliance with federal and state law respecting “reporting of compensation for certain employees.”
— The district needs to take greater care when monitoring the budget and recording transactions, including the state aid debit and credit memos to ensure that it does not over-expend appropriation lines.
— The district needs to ensure all revenue/receipts and expenditures are properly recorded. The district must approve board secretary and treasurer’s reports within 60 days.
–The district must obtain county superintendent approval for all required general fund transfers more than 10%.
Are we still acting like children? Isn’t this deeper than “Special Education unplanned expenses”? What about the BOE campaign/election controversy that some board members wanted and others resisted a full audit?
What about rumors of large unpaid bills? With monies taken then from next years budget to pay for past years expenses? Not fully accounted for?
Whispers were heard in the wind about this possibility months ago. The auditor gobbledygook seems to confirm it. But inquiring, good government minds really should want to know in detail. And out it clearly. If nothing serious, fine. If shenanigans or worse, do your elected and appointed jobs.
Why is it so hard to put put Montclair public employees on the accountability hot seat — either in Executive Session, or open hearing? In this case the Business Manager, hired by a former Superintendent. Other townships do it.
One suspects, based on past history of Boards and Councils here, that some members are again inhibited by fears of rocking the community boat. Stop it!
‘Do the Right Thing’…
– Spike Lee
It is outrageous, the news that Montclair has an expected deficit of $2,000,000. There was just a deficit of $5.5 million dollars in 2023-2024, which resulted in the firing of 31 teachers and 34 paras.
So here we are again. Parents, please remember, these are your children, and poor budget management affects the level of instruction and services your child(ren) will receive. And you are paying for this through your taxes. Questions should be asked of the BOE and you should demand answers.
But I do have a few questions for the BOE.
1.Why has the BOE not certified that their budget is in compliance with State and Federal law regarding the reporting of compensation (money)for “certain employees?”
2 Who are these “certain employees, and how much compensation (money)is involved?
3 Why was expenditures (money), not properly recorded.? What is the amount of expenditures not recorded?
4 Why were revenue/receipts not properly recorded, and for what amounts?
5 Why are general funds in excess of 10% being transferred without county superintendent approval.
These are some of the questions I think taxpayers should be asking the BOE.
But, since the BOE has not answered any, the Essex County Superintendent should be asked the same question, since he has oversight of all schools in Essex County. His contact is: Essex County School Superintendent, Joseph Zarra, 60 Nelson Place, Newark, NJ 07102. Email:joseph.zarra@doe.state.nj.us
Tel 973-621-2750
Two words: forensic audit.
Enough. There are countries where there’s ONE school district per 500,000 population. I’m not kidding. As in one administrator with corresponding staff. Not only they make do, they produce better academic results. By that, I mean children who can read, write converse, understand science, and are mathematically literate. And here is this puny town of Montclair with barely 40,000 residents and it is paying circa $200,000 to someone to mismanage the budget and produce deficit and a student population half of which will need remediation courses in college.
Tangentially, there goes Sean Spiller promoting lowering thresholds to become a certified teacher in New Jersey. Before you know it, you won’t need to be able to read or do math before you are allowed to teach either in New Jersey schools. That’s Sean Spiller for ya. But those mailers are so nice and shiny.
Sorry if I’m sounding mean. I got a new one in the mail yesterday. Filed it in my shredder, of course. Need to get off his mailing list. Disgusting.
I agree 100% with all points raised by David Herron. People like him should be part of the system. Enough of all those outsiders who do nothing by raise taxes and fleece us. Like that BA who left East Orange under a cloud and this tragic Lapolleon who thinks he can run Montclair just because he had some political jobs in the past. We all have our little delusions.
People should have a discussion about the $188MM elephant in the room. Specifically, the utilization of the $70MM tranche the district bonded two years ago. Maybe we have spent $15MM of this $70MM.
We were all told almost all (94%) of the total referendum total would be eligible for 40% State reimbursement. OK, the projects first in line had the lowest eligibility (maybe 60%), but that still translates in $3.6MM of reimbursable costs. Maybe we should ask the district where we are on the reimbursement claims. We all know the district has a particularly poor record of execution in these matters. The auditors just reminded us we have $2+MM that the district has yet to submit from past, non-referendum projects.
Hey, it is just $.