SANFORD — The city will have to temporarily tap into its own funds to meet payroll and pay vendors to make up for a $1.6 million school department shortfall brought on by a misunderstanding over transmitting required paperwork to the state.
The shortfall came about because the school department missed an extension deadline to transmit the annual school and municipal audit to the Department of Education. Because the deadline was missed, the state is temporarily withholding the $1.6 million in monthly state education aid it owes Sanford, according to municipal and school officials. The money is expected to be sent to Sanford next month.
City Treasurer Paula Simpson said she’ll move money around this week to meet payroll and pay the city’s vendors. She said the city will be able to transfer funds to meet the city’s financial obligations without tapping into long-term investments that pay a higher rate of interest.
“We’re OK,” said Simpson.
School business manager Scott Wyman said it was his understanding that the auditing firm, Purdy Powers & Company, was transmitting the audit to the state, he said Monday, though he acknowledged that ultimately it is his responsibility to make sure the information is transmitted. Wyman said the school department has appealed the state’s ruling in an effort to secure the money sooner. As of early Monday evening, he had not received word on whether the appeal will be successful.
Simpson said she knew something was awry when the education aid didn’t roll into the city’s coffers by April 24, as it usually does, so she made a few phone calls to the state and discovered what had transpired.
This marks the first time Purdy Powers & Company has performed the annual audits. In prior years, the audits have been completed by the end of December, but that didn’t happen this year, said Simpson. Because the audit wasn’t ready at the usual time, the school department applied to the state education department for an extension and was given a March 31 deadline.
Wyman, for his part, said the school department itself didn’t receive a copy of the school audit until April 1. He said he sent it, and then this past Friday hand-delivered a copy of the municipal audit, and met with the deputy commissioner of education to appeal the withholding.
“We are reviewing the situation and taking steps to ensure that a process is in place to prevent this from happening again,” said Superintendent of Schools David Theoharides in an emailed statement. “A misunderstanding between the auditor and the school department around whose responsibility it was to submit the city and school audit report was the reason for the delay in submission. We are working closely with the DOE to help resolve the situation as soon as possible.”
Sanford Mayor Maura Herlihy said she’s been told by city councilors that they’re dismayed about what happened, but that the city will be able to manage until the state funds flow in.
“Because we’re financially smart with our money, the city is able to cover this,” she said. “It’s $1.6 million the city has to cover, granted for a short amount of time.”
— Senior Staff Writer Tammy Wells can be contacted at 324-4444 (local call in Sanford) or 282-1535, Ext. 327 or twells@journaltribune.com.
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