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Donna Perry: Flunking School Accounting and Failing the Kids

Thursday, March 15, 2012


It was an instructive coincidence earlier this week that on the very day that the prospect of a full municipal meltdown of Woonsocket was becoming painfully clear, a new battlefront had opened up a few towns over in the already bankrupted city of Central Falls.

It’s seeming more and more likely that Woonsocket could be following in Central Falls’ fiscally ill-fated footsteps as the similarities between the two go beyond sharing a storyline of being formerly industrially thriving communitiesthat have faded into aging, worn down looking cities.

Woonsocket is now reeling under a set of problems that bear a very strong similarity to conditions that were present when Central Falls collapsed into a state ordered receivership last August.Although the accomplishments involving budgetary, contract, and pension overhauls delivered by the Central Falls Receiver have produced a fiscal picture for the city that is vastly brighter than it waseight months ago, it still seems that, as is now happening in Woonsocket, the road gets bumpy when it winds to the school department finance office.

That’s why, once again, Receiver Robert Flanders is ahead of the curve and working one step ahead of other municipal leaders in advocating for the type of city management improvements that need to take place in communities statewide. Woonsocket’s messy and improperly tracked school department costs that triggered the huge deficit is vividly making the case for Flanders’ current push in Central Falls to consolidate the school department’s finance/superintendent’s office within citywide government.

More troubling than the revelation of unseen deficits in the millions of dollars is the prospect that a Rhode Island public school system could be forced to consider abruptly closing its doors to students mid-way through the spring. The Woonsocket fiscal emergency should be sending a chilling wake-up call not only to municipal leaders in othercities and townsbut also to Governor Chafeethat if we can’t contain the exploding costs of running our school districts, and demand smarter financial practices of them, the systems are doomed.

What is now on full display in Woonsocket is a disastrous emerging pattern that’s been seen in several of the state’s communities where the overwhelmed school finance office makes serious accounting errorsand the result is an unmanageable school department deficit, as unfolded in East Providence at the end of last year which propelled that city into state oversight.

Laying Down the Gauntlet

In Woonsocket, the School Committee began the week laying down the gauntlet andthreatening to take an unprecedented action and shut down the city’s schools by the first week of April because the city is running out of cash, and like Central Falls over a year ago, running out of options to gets its hands on any. The city is carrying junk bond ratings status and the schools have an immediate $4 million dollar backlog of overdue bills. Though the city now says getting an infusion from the state could help it “limp” to the end of the school year, it would seem that kind of emergency aid is akin to putting a Band-Aid on a gushing wound. Even if the state can extend the city’s school aid formula allotment early, the school district’s built-in cost problems will not go away.

It’s not surprising that the crowd at Tuesday evening’s Central Falls public meeting on Flanders’ consolidation plan appeared angry. Certain figures who are presently attempting to both discredit the significant reorganization achievements and undermine the fiscal reforms and job consolidations that the receivership operation has accomplished, are now working overtime to turn city residents against his office and staff. However, their undermining campaign and arguments are irrelevant to the wider debate on the need to install a modernized office of administration that would combine school department and citywide fiscal operations under one umbrella so that the city will go forward with a more competent municipal management structure once the receivership comes to an end.

One would hope the troubled Woonsocket school finance office operations—and others—will ultimately take their cue from the proposed merger plan in Central Falls, because, as State Revenue Director Rosemary Booth Gallogly soberly observed this week of Woonsocket’s woes: “they’re not the only ones with cash problems.”

Although it’s too early to know if the state will be able to cobble together enough aid to prevent an early school shut down in April, one thing is already clear:cities and towns that allow unskilled or overwhelmed bookkeeping to persist within School Department finance offices are not only allowingflunking at accounting to occur—they are failing the children in a most profound way.

Donna Perry is a Communications Consultant to RISC. http://www.statewidecoalition.com

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