The East Windsor Board of Finance Wednesday decided to tell board of education officials that it disagrees with school officials on when $325,000 was posted to pay for health insurance.
Board of finance members said they are not questioning what the money is spent on just when it can be spent. The board plans to apply the expenditure to the 2012-13 budget at its August meeting.
“No one’s telling the board of education how they spend their money,” Bowsza said. “We’re just telling them what fiscal year it can be spent in.”
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.
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.
Cabral said the town’s auditors have maintained that money can’t be used from one fiscal year to prepay expenditures in the next. While state statutes may say the school system can make such financial moves, the law also says the budget must comply with the audit, she said.
The town has been an ongoing conversation with school officials about the situation since last fall.
Bowsza said when voters approved the 2012-13 budget they didn’t say the board could spend what was approved plus money left over from another year.
“We have to follow our auditors,” Bowsza said.
Board Member Joseph Pellegrini said it’s one town budget even though there may be different departments in the town.
“That needs to be clearly recognized by the board of education,” Pellegrini said. “One town budget, one audit.”