The East Providence School District faces a projected $1.3 million deficit as it heads into the home stretch of the FY26 budget (which runs from Nov. 1, 2025 to Oct. 31, 2026).

The sobering news was delivered during the Aug. 11 meeting of the East Providence School Committee, where new Superintendent of Schools Robert Perry introduced two outside consultants (Joe Balducci and Joseph Crowley) and the district’s new interim finance director (Mark Piccerelli), who are working on resolving the deficit and identifying how that figure ballooned to such a degree in the first place.

Based on their presentation, the school district faces significant overruns in three key areas: transportation (projected to be $918,000 over budget); out of district special education placements ($1.1M over budget); and utility costs (specifically its electricity line item, $325,000 over budget). Those figures, balanced by revenue projections, create the $1.3 million deficit.

According to Balducci — a consultant with Clifton, Larson, and Allen, and the recently-retired, longtime finance director for the Cranston School Department — the city has also still not completed its audit for the FY25 fiscal year that ended on Oct. 31, 2025 (which was due six months from that date on May 1).

Not having those audited figures for the end of last year, Balducci said, makes it difficult to have certainty over the current projected deficit, which Piccerelli said was a best estimate given historical projections.

“It’s important that audit timelines are met,” Balducci said, while adding that East Providence was far from the only school district to be behind schedule in its auditing practices.

Balducci did deliver tentatively good news to the committee that, according to their initial analysis, the unaudited FY25 budget does appear to be balanced, and should be ready to be sent to the State Auditor General without further delay.

Perry said in an interview on Monday that preventing these kinds of delays would be a priority in the future, and the district will be better served by having Piccerelli on board.

“Going forward, we have former auditors on staff who know what it takes to get the audit done,” Perry said. “So I’m feeling like next year we’re going to be on time and hopefully we’ll be able to be among the more early ones so that we can show the Auditor General that we’re taking care of what needs to be taken care of.”

How did we get here?
Setting the table for the presentation, Perry told the committee there was a fair amount of instability occurring in the school finance office prior to his start date on July 1, 2026.

According to Perry the former finance director, Alexandra Gonzalez, had resigned on June 26, and the district had been without a controller for a number of months. The staff accountant also resigned in July, effective Aug. 4.

Perry said in an interview on Monday that it was his belief that insufficient staffing led to the deficit; nothing purposeful or untoward.

“I don't think there was any malfeasance whatsoever. Knowing all of the individuals who were responsible for it. I do think that there were staffing issues,” he said. “We've been understaffed for the past year. We were for a long time without a controller, which impacted, I'm sure, the finance director's ability to do her job.”

In regards to how the line items were overspent to the degree of a projected $1.3 million deficit, consultants and Perry didn’t have an immediate answer, but there was talk about how the situation was actually better than a potential $3 million deficit that was floated a couple of months ago.

“We thought this was going to be much more than has been reported today,” Perry told the committee.

Balducci noted that the budget for electricity was also overspent by nearly $400,000 in FY25. That budget was increased from $850,000 in FY25 to $1,000,000 in FY26.

“There was an attempt to address that overage from the prior year, but clearly not enough,” Balducci said.

Perry said in the Monday interview that federal ESSR dollars from the pandemic had kept things stable for school districts for the past few years, but with those elapsing the fiscal realities of running a school district are becoming more and more difficult.

He mentioned to the school committee that as much as 83% of the entire budget goes to salaries and benefits alone. Meanwhile, other fixed costs like insurance and utilities are going up between 10-12%.

“We've had the luxury of some stimulus money over the past few years, which has really helped,” he said. “If that stimulus money hadn't existed, we might have been in this position five years ago.”

What to do now?

Perry said in the interview on Monday that there was a spending freeze in place while the district determines a plan of action. However, Perry and the finance team were candid in discussing the challenge that awaits them to find enough in savings to close the deficit.

“We can do virtually nothing in terms of any kind of reduction of staff that would have any kind of impact. All that would have had to have happened prior to June 1 in terms of making any kind of reductions. Because of that, there’s very little we can do,” Balducci said. “Principals and directors have made requests for the remaining 20% of the FY27 budget…It will be necessary to closely consider requests for items like equipment, furniture, and fixtures.”

Balducci said that out-of-district placement for special education was not something they could simply avoid paying for, transportation costs were largely contracted, and savings at the classroom level didn’t amount to much in the scope of a $100 million-plus budget. Deferring maintenance, he added, only creates more expenses in the long run.

“If you allow roofs to leak, you just end up having more damage that you’re going to have to pay for down the line,” he said. “At the end of the day, the discretionary dollars you have available where you can make some management decisions, there isn’t much. That’s the difficulty in trying to manage school operations.”

Perry mentioned in the interview on Monday that the district would be examining a number of things to do moving into new FY27 budget, including an energy efficiency program that Balducci had utilized in Cranston, to get the electricity budget under better control. He additionally spoke about looking into transportation efficiency and even the consolidation of schools.

“Using economy of scale to provide the best level of programming and distribution of our budget needs to be looked at,” he said. “Things look very different in education in 2026 than they did in the 1950s and 1960s when many of our structures and ways of doing things were created.”

Perry also mentioned there being a desire among other districts for the state to step up its level of assistance when it comes to providing funding for out-of-district placements for special education.

“We know that we have to provide students with services. We want to provide students and families with services and they deserve those services,” he said. “We just have to make sure that we're budgeting properly to allow for that, and that's a challenge.”

All of that said, Perry indicated the district would be hard-pressed to not request the maximum 4% increase in support from the for the coming budget.

Finding the positives

Perry said that with the assistance of its temporary consultants and its new finance director, he was still confident that the ship could be righted before the end of the fiscal year on Oct. 31.

“At this point we have two months to try to right that up, and we will do so,” he said.

Whether or not the district will have to formulate a corrective plan for the next five years in conjunction with the Rhode Island Auditor General will come down to the amount the school department has in its committed fund balance — an accounting figure that exists outside the realm of money a district has on hand to actually spend.

If the district’s fund balance exceeds the projected budget deficit, a corrective plan won’t be necessary. As of Tuesday morning, Perry stated that the fund balance amounted to $2,539,708; well exceeding the $1.3 million projected deficit. Those numbers will need to be audited by the state, however.

It should also be stressed that the fund balance is not literal money that can be used to fix the shortfall.

Perry told the committee that moving forward, financial information will be presented in a clearer, more concise and easy to understand way.

“My hope is that you will continue to be patient…as we get all of this put into a form that will provide you with the opportunity to make sound decisions,” he said.

Perry said on Monday that it was important not to lose sight of the positive direction the East Providence School District was headed in, with new school facilities and rising advanced placement scores year over year.

“I would say that despite what you might hear in some small sections of the internet, people are happy with the schools,” Perry said. “And it's going to be my job to continue to promote that to let the world know that we have the best teachers in the world and that we have the opportunities for all of our kids to to grow, and that we have a supportive community.”