East Windsor Board of Finance Tells School Officials Health Insurance Payment Will Be Posted in 2012-13 Budget

The East Windsor Board of Finance has sent a letter to the board of education telling it that the prepayment of $325,000 for health insurance will not be allowed.

The board of education on June 27 voted to spend the money in fiscal 2011-12 to prepay health insurance in fiscal 2012-13. The money had to be encumbered, or committed to a payment, before June 30, officials said.

In the letter, written by chairman Jason Bowsza, the board of finance says it consulted with the town’s auditor, Rob Howard, and became clear that the prepayment is not an allowable practice.

“We must keep monies from one fiscal year in the appropriate fiscal year and refrain from rolling monies from one year to the next,” the letter says. “ We have a responsibility to honor the wishes of the voters of East Windsor as expressed through their adoption of our town’s budget.”

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School officials had planned to use the money in fiscal 2011-12 for the same purpose, but had been told by Town Treasurer Catherine Cabral that she believes it would be wrong to spend money from one year in the next, Superintendent of Schools Theresa Kane told the board on June 27.

However, school officials got a legal opinion from the district’s attorney saying it’s allowable under state statutes, and advice from state Board of Education officials that the practice is proper, Kane said.

The board of finance said that by state statute, town charter and government finance standards its responsibility to oversee the town’s finances as a whole. At its July 18 meeting, the board of finance said it would support the town treasurer and send school officials the letter.

“Accordingly, at our meeting of August 15th we will be formally supporting the town  treasurer’s decision to post the expense in question as a FY2013 expenditure,” the letter said. “While we respect the right of the Board of Education to manage their approved appropriations as they deem appropriate, we have an obligation to ensure that allocated monies are spent in the appropriate fiscal year.”

The board of education is expected to discuss the budget at its meeting tonight.