East Windsor Selectmen Agree With Town Treasurer on School System's $325,000 Expenditure

Although they say it is an issue that ultimately rests with the board of finance, East Windsor selectmen said they are supporting the town treasurer’s position that school officials shouldn’t use $325,000 to prepay health insurance in fiscal 2012-13.

The board of education voted on June 27 to proceed with the prepayment. 
The money had to be encumbered, or committed to a payment, before June 30, officials said.

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 school system has prepaid insurance in the past. Kane said doing so frees up money that can be spent on other needed items in the schools. Prepaying health insurance will also be the cleanest to undo if officials somehow find it was done in error, she added.

At their recent meeting, First Selectwoman Denise Menard told the board of selectmen that the issue was not a last minute one and that Town Treasurer Catherine Cabral had been proactively dealing with it for a year. While school officials have a legal opinion that using  the money is allowed under state statutes, town officials disagree that it should be used.

“There is a difference between what’s legally appropriate to do and what’s appropriate in our audit,” Menard said.

Town officials do have opinions from the auditor recommending against the expenditure, Menard said.

Cabral said there is discussion going back and forth between school and town officials. She said she understood they were waiting for an opinion from the state board of education whether or not prepayment would violate the requirements of the minimum budget  requirement.

The town and schools are under one audit and must follow the rules of that audit. The key phrase is “what’s allowable and what’s auditible,” Cabral said

Selectman Richard Pippin said the discrepancy could have an impact the town’s ability to get favorable rates when going out for bonds.

“We need to be on the same page,” Pippin said.

Menard said she expects the board of finance to discuss the issue at its next meeting.