The District has suffered for more than a year due to the lack of high level financial oversight, and this lack of staffing and oversight has impacted all operational departments.”

Mary C. King, CPA

The Bristol Warren Regional School District has received a sobering assessment of its financial management, systems and controls. A consultant hired to review the district’s financial management identified more than a dozen areas of weakness, mismanagement, inadequate staffing, deficit spending, lack of oversight or misalignment with, or violation of, state education department standards.

Mary C. King, a certified public accountant and chief operating officer of the North Kingstown School District, was hired in January to assess the Bristol Warren district’s fiscal health and oversight. Ms. King’s report was submitted several weeks ago, and the 16-page analysis was discussed during a Bristol Warren School Committee Budget Subcommittee meeting last week. Budget committee chairwoman Shelia Ellsworth said of the report, “We can’t wait for a CFO to be hired. This stuff has to be done now … It’s going to be a large undertaking.”

Budget committee member Victor Cabral said, “It’s sad when we’re lacking all of this in our district.”

The district has been without a chief financial officer since the fall of 2019, when Raquel Pellerin resigned her position and took a job working for the Town of Bristol. She then left that job a short time later and now works as chief financial officer for the South Kingstown School District. Despite a lengthy search, Bristol Warren has not yet hired a replacement.

The first item of focus in Ms. King’s report is the lack of a qualified financial leader within the district. The district’s finance department consists of an interim business manager and two accounting clerks. “For a regional school district with total expenditures of more than $60 million, this is a severely understaffed finance department,” Ms. King wrote in her report. “The day to day duties and requirements imposed by the RI Department of Education, as well as the sheer volume of activity in an organization of this size, including cash management and projections, financial reporting and oversight, procurement oversight and contract administration, debt service management, and general fiscal and audit compliance, cannot be adequately completed by a department with only three employees. The District has suffered for more than a year due to the lack of high level financial oversight, and this lack of staffing and oversight has impacted all operational departments.”

While Ms. King praised the current interim business manager for being an integral employee who is critical to the day-to-day functioning of the district, she said that person is not qualified to handle his current responsibilities, and she suggested that the finance department should be led by a qualified CFO, as well as a new controller-level position, in addition to the current business manager and the two clerks.
Ms. King’s report includes criticism and suggestions in numerous other areas, such as …

Financial controls lacking

Ms. King reported that financial controls are lacking throughout the district and between various departments and the finance office. “Encumbrances were not accurate and not up to date, other departments did not present financial information in a timely manner or at all, and invoices were often late and not accounted for/encumbered in the financials,” she wrote.

Purchasing and contracts

“The district lacks a formal process for procurement of goods and services and ongoing contract administration …A process for the consistent bidding of goods and services over $5,000 should be formulated.”

No management of grants

Ms. King reported that grants received by the district are not being properly administered. “Grant funding is not recorded in a timely, accurate manner in terms of encumbrances and monitoring of balances.”

COZ running in deficit

Ms. King reported that the Child Opportunity Zone (COZ) Enterprise Fund is in a large deficit this fiscal year and is not receiving fiscal or operational oversight. She also questioned one of the district’s fiscal maneuvers two years ago, when it moved a large sum of “surplus” money from a COZ fund to pay for social emotional supports in district schools. She also strongly questioned that maneuver and suggested the district seek an attorney’s opinion on whether it is legal.

Food service: deficit and surplus

Ms. King reported that the district’s food service program is facing a deficit this fiscal year and is is not receiving fiscal oversight. Provider Chartwells is projecting a $78,000 deficit for Bristol Warren this year. On the plus side, this deficit could be offset by a $671,000 accumulated surplus in the Food Service Enterprise Fund. On the negative side, this surplus balance exists in violation of state policy.

“Based on RIDE regulations, a District may only accumulate three months’ average monthly expenses, in this case an estimated $311,000. Should the fund balance exceed this amount, the District must take immediate action to either reduce student prices, improve food quality or take some other action aimed at improving the food service operation. At this time the District is out of compliance with this RIDE requirement. The District needs to take action immediately to rectify this non-compliance.”

Real the full analysis of Bristol Warren Regional School District operations and financial managemenet here.

Transportation lacks oversight

Ms. King questioned whether anyone is overseeing the transportation program and contract with provider First Student. “It is not apparent if any in-district personnel are responsible for fiscal and operational oversight of this contract in terms of reviewing routes, financial oversight, contract review, etc. It is also not known the extent of the review of district transportation needs that may or may not have been conducted at the time of the contract negotiation in 2020.”

Facilities management lacking

Ms. King submitted a lengthy critique of the district’s facilities management, highlighted by her assessment that the district lacks a strategic plan for routine maintenance and capital projects. She said the director of facilities is a new employee this calendar year and is still getting familiar with the role and lacks clerical support. She also reported that the district has not engaged its Building Committee in a long time, another violation of state standards.

“RIDE regulations require certain members of the district and community be engaged as part of the School Department Building Committee. It is important that this committee meet as soon as possible to determine the direction forward in conjunction with recommendations and information from district staff.”

Ms. King went on to document numerous plans and reports that must be updated or submitted within the next year, or significant district funding, like housing aid, could be at risk.

Capital planning

Ms. King said many districts struggle to develop long-term capital investment plans, including Bristol Warren. She wrote, “While the district does receive a significant housing aid reimbursement from the state (63%), and these funds are sent directly to the district and used for capital investment, a better capital investment plan is needed for future infrastructure needs, which will continue to grow as buildings continue to age … It is critical that the District work toward a 5- to 10-year asset plan and secure a consistent, identifiable source of funding for the protection of school buildings. Planning is key.”

No qualified HR director

Ms. King reported that a district as large as this should have a qualified Human Resources expert. It does not. “Prior to late January 2021, the district employed a chief operating officer who had a human resources background. That position has been vacated. Remaining in the HR department are two clerks – one who is responsible for benefits administration and one who is responsible for payroll.”

Special education oversight lacking

Ms. King offered analysis on why it’s important to know and track expenses in special education, which can change throughout a school year and significantly impact district finances, especially things like out-of-district placements. “When asked for financial data in terms of out of district placements, Medicaid revenue projections and other financial expenditures relative to the Special Education department, data was not readily available and is not kept in a consistent, updated format.”

Reporting and transparency

Ms. King identified numerous financial reports that should be filed consistently but are not. “The district does not provide consistent, timely financial reports to the school committee and for community transparency,” she wrote. “In order to provide transparency, the BWRSD SC agendas and minutes should have back-up documentation for all agenda items requiring approval. Source documents, spreadsheets and memos describing the requested approval should always be part of the agenda package and the final minutes of the meeting. This information should be included on the District website. This is a matter of accountability and transparency and good record keeping.”

And there’s more …

Ms. King also criticized school committee policies as out of date: “A review of the BWRSD School Committee policies shows that most policies are outdated and have not been revised in many years.” She also was critical of a decision made last summer to move $1.2 million from the district’s surplus fund to pay for operating expenses this fiscal year: “Unless the District is prepared to make cuts in the following year, fund balance should never be used to fund general operating expenses.” The district is facing more than $2 million in cuts next school year, after using money from its surplus fund last summer.