Montclair schools hear audit report

By ERIN ROLL
roll@montclairlocal.news

The numbers don’t quite paint a rosy picture in the latest financial audit for Montclair’s public schools.

The schools finished out the year with a total fund balance of $9.2 million, including $4.6 million in cash and cash equivalents.

“Bad news, you’re going to have to face a very difficult ’18-’19 budget year,” Raymond Sarinelli, of auditors Nisivoccia LLP, said in a short presentation at the Dec. 18 Board of Education meeting.

The fund balance is the lowest it has been in 10 years, Sarinelli said.

Board member Joe Kavesh asked, “How would you compare our overall district financial stability with other similarly sized districts?”

Sarinelli replied, “I think you’re at the low end of the spectrum that we’ve been discussing for the last couple of years.”

Kavesh asked whether there were any areas in which the district could look into reducing expenses.

Sarinelli noted that the audit report did go into some details on food service and transportation. Another possibility that the audit discussed was the idea of shared services, which then led to a philosophical discussion on whether school boards could regionalize services, Sarinelli said. “But I don’t think Montclair is particularly situated to regionalize, because of the high population of Montclair and the surrounding districts,” he added.

As for revenues, Sarinelli said that such areas as facilities rental and tuition had already been addressed.

For food service, the audit recommends evaluating students’ accounts receivable at the end of the year, then either collecting the money or canceling the debt.

In June, it was announced that about 1,500 students had a total of $100,000 in unpaid lunch balances at the end of the 2016-17 school year. A number of Montclair parents reported that the charges were incorrect in several cases; some families reported that their children had been charged for lunches that they had not eaten.

In response, Montclair announced that it would be reviewing its policies on outstanding meal balances.

For student activity funds, the audit recommends that the business office make sure that the policies for handling money are the same at each school.

The report noted that while the district had taken care of some items since the last audit, including recommendations on budget overexpenditures and on student activity fees at Montclair High School, other items still remained. “The remaining prior year recommendations regarding student activity dating of receipts at the Renaissance Middle, Bradford Elementary and Nishuane Elementary Schools, the evaluation and collection or cancellation of the students’ food service accounts receivable at year end, and the accounting records for Capital Projects were not resolved and are included in the current year’s findings,” the report said.

On Dec. 22, Kavesh said: “I thought that the audit was very thorough, a deep dive.” He said that the numbers themselves were not surprising to the BOE and the finance, facilities and technology committee. “They were certainly sobering,” Kavesh said.

The district is in the process of compiling financial data as it prepares for the budget process early next year. Ahead of that, the Board of School Estimate and the BOE have hosted community meetings to explain the budget process to the public.

“Every budget is challenging for its own reason,” Kavesh said, adding that financial realities change from year to year. “It’s not a scare tactic. Financial realities are what they are. We’ll take it accordingly.”

On Dec. 20, Board President Laura Hertzog said: “It’s always good for the board to have information from the auditor as a key part of moving forward in the budgeting process. It is essential to have accurate data, and I anticipate that the finance committee will be looking into more specifics before further presentations to the full board.”

“The audit is a good tool for holding the district accountable to Montclair taxpayers,” said Interim Superintendent Barbara Pinsak. “I am pleased that the results were positive in terms of our management. This now will give us necessary guidelines for ’18-’19 and beyond.”