Hart, Kortze Discuss Options For Transparency In School Financial Reporting

By John Voket

Over breakfast one recent morning, the chairmen of the school and finance boards met to discuss the future of the Board of Education’s recently adopted system of encumbrance-based financial reporting.

Both William Hart, who leads the Board of Education, and John Kortze of the Board of Finance agreed the meeting’s outcome was positive, with Mr Kortze telling The Bee there was consensus that no matter how that reporting is labeled, providing greater and more transparent details should be the school board’s ultimate goal.

During the finance board’s most recent meeting October 14, Mr Kortze told his board that an attorney, Tom Mooney, had advised that the school board return to a formal practice of reporting transfers. The finance board chairman was also pleased to hear that Mr Hart was willing and motivated to “drill down another level or two,” in the depth of regular financial reports presented to his board during one of the school board’s two regular monthly meetings.

Mr Kortze told his board that the issue of clarifying exactly how the school district produces and presents financial information is secondary to the level of detail required for finance board members to accurately advise other town elected officials, particularly the Legislative Council.

“Whatever occurs, more detail would be better,” Mr Kortze said, adding that he was still waiting for someone to provide statutory evidence that the school board was only required to present financial reports to the finance board on a quarterly basis.

On October 20, Mr Hart acknowledged he had met with Mr Kortze over breakfast to talk informally about the district’s financial reporting practices. The school board chairman told The Bee that it is his goal to “make the financial reports as clear and transparent as possible, without saddling the district’s finance office staff with unnecessary work.”

Mr Hart said he and the board had sought and received some “policy advise from some experts in the field,” but the school board’s policy committee had not met to discuss it. He specifically cited information presented by Mr Mooney, who is an attorney with Shipman & Goodman in Hartford, and author of a book entitled, A Practical Guide to Connecticut School Law, a comprehensive treatise on Connecticut school law, published by the Connecticut Association of Boards of Education (CABE).

Mr Mooney also writes two monthly columns, “See You in Court!,” which appears in the CABE Journal, and “Legal Mailbag,” which appears in the Connecticut Association of Schools Bulletin.

Mr Hart said his board sought the counsel of Mr Mooney to “make sure we are in compliance with the law,” regarding reporting to the finance board. But Mr Hart said nonetheless, “I don’t see us moving away from encumbrances because they are much more detailed than transfers.”

The school board chairman said because previous financial reporting at the macro level did not provide as much visibility to fine detail, he is challenged to “find a mechanism to create reporting at a microscopic level.”

“The formal [reporting] process can become cumbersome, but those monthly reports already supply great detail,” Mr Hart said.

Mr Hart said that delving into the minutiae of district financial reporting has already yielded one area where greater clarity could be achieved, in the accounting of how the state’s Excess Cost Grant impacts the entire program of expenses related to special education.

The school board chairman illustrated that if the district was to receive $500,000 in Excess Cost Grants for special ed transportation to apply against a $4 million total cost for the service, the district’s report formerly showed the total transportation cost was $3.5 million — already reflecting the net cost after the grant is applied.

“But we want to measure the total program’s effect,” he said, adding that going forward, Mr Hart has requested the school business office to include “subdetails to separate the total expenses from the reimbursement.”