How badly were the Claremont School District’s finances mismanaged?
At one point, a bookkeeping document reported the district had a $390,000 fund balance in the bank. But when interim business administrator Matt Angell checked with the bank, the account actually had a negative balance of $2.5 million.
That was just one of the gasp-inducing details about the district’s fiscal mismanagement that surfaced during a state Senate Education Committee hearing on Tuesday. Claremont is in turmoil after revealing a $5 million budget deficit that has thrown the district into crisis — and that school officials have yet to explain.
“We were all shocked to learn that Claremont is facing a $5 million deficit stemming from gross financial mismanagement,” said committee chair Sen. Ruth Ward (R-Stoddard). “We still need better answers on what happened, but we now know that the district spent millions of dollars that they never had.”
Ward, who represents Claremont, convened the committee to consider a proposal to offer the district a taxpayer-backed line of credit against future state aid to help it stay open for the rest of the year. Ward invited members of the House Education Funding Committee to participate as well.
The result was an embarrassing roll call of Claremont’s fiscal mismanagement — some House Republicans suggested intentional malfeasance — and a decision by Ward to postpone plans for the senators to vote on whether to consider the proposed rescue plan.
Republican legislators made it clear they have no interest in throwing a lifeline to Claremont’s elected school board or administrators until they have assurances that reforms have been put in place.
Rep. Jim Kofalt (R-Wilton) asked if it was true that “even the most basic accounting functions simply were not being performed, like balancing the checkbook — how much cash do we have and how many checks do we have outstanding?”
“You are absolutely correct,” replied Angell.
When Rep. Riché Colcombe (R-Antrim) asked about reserve funds the district might use to address the emergency, Angell told her, “The prior administration depleted all the reserves before the end of the last fiscal year.”
The big question from lawmakers was, “How did this happen?”
Claremont School District attorney James O’Shaughnessy didn’t sugarcoat his answer.
“I don’t have a great answer for how long or why this was going on. It’s just bad procedures internally, within the administrative office, that no one ever fixed,” O’Shaughnessy told legislators. “They really need to clean house, and I think that’s what they’re doing.”
“It was the Wild West,” Angell added.
O’Shaughnessy said the crunch time for the district this school year will come in April, a fact Republicans seized upon to push for a delay.
“I am concerned that this sets a precedent,” said Kofalt. “I think there are a number of school districts that are in potentially difficult times — perhaps not as bad as Claremont — but I do think it’s only a matter of time before someone else comes with a similar problem.”
Kofalt called the Claremont situation “urgent, but not immediate,” and he urged his fellow lawmakers not to act in haste.
House Majority Leader Jason Osborne (R-Auburn) released a statement expressing similar views.
“House Republicans will fight to protect the taxpayers from bailing out the incompetence of Claremont schools. I appreciate the efforts of Claremont’s state senator and look forward to working on a solution that will solve the issue in the long term, not a short-term fix that throws money at the problem and hopes it goes away.”
And state Sen. Victoria Sullivan (R-Manchester) said she was open to the idea of the state taking action, but what she heard Tuesday was problematic.
“During the hearing we learned that the depth of their debt may not yet be completely understood. That fact was very concerning to me,” Sullivan told NHJournal. “I think the bill that will be presented will have more oversight, and perhaps a path for the step to step into similar situations before they escalate to this point.”
Democrats, like Rep. David Luneau (D-Hopkinton), disagreed. He told his fellow lawmakers the state had a duty to step in — and soon.
“I think it’s really important that we, as a legislature, act right now, because kids in Claremont deserve a high-quality education,” Luneau said. “And it’s the state’s responsibility and obligation to see that this happens in Claremont.”
O’Shaughnessy also wants the state to act quickly, but he rejected the claim that the state was responsible for the Claremont crisis.
“I want to be clear: this is the district’s problem,” O’Shaughnessy said. “They got themselves into this problem. They need to fix this themselves. They don’t blame the state for this problem.”
And he added that the district is not asking for a bailout.
“This is an ask that you give them access to funds early so that they can work through the problem without hurting the community and the kids.”
