'80-page document of nightmares': School financial audit stuns Trumbull officials

Members of the town's Board of Finance and the Education Committee of the town council reviewed the document at a joint meeting conducted via Zoom Tuesday, and were stunned and frustrated by the audit's findings.

Members of the town’s Board of Finance and the Education Committee of the town council reviewed the document at a joint meeting conducted via Zoom Tuesday, and were stunned and frustrated by the audit’s findings.

File photo

TRUMBULL — For years, the town’s schools operated without proper financial oversight, according to an operational review conducted by the accounting firm PKF O’Connor Davies.

Members of the town’s Board of Finance and the Education Committee of the town council reviewed the document at a joint meeting conducted via Zoom Tuesday, and were stunned and frustrated by the audit’s findings.

“The overriding takeaway is that the processes are not adequate,” said town council member Thomas Whitmoyer, the Education Committee chairman. “In several instances, the district does not comply with state statutes, best practices, Board of Education policy and the town charter.”

Board of Finance member Martin Isaac was more blunt, calling the report “absolutely shocking” and an “80-page document of nightmares.”

“We were literally not following the law,” he said. “It’s hard to fathom how this could happen.”

The report covered the three-year period from July 1, 2017 to June 30, 2020, although officials at the meeting indicated the practices dated back even longer. The town council ordered the audit in early 2020 after interim Schools Superintendent Ralph Iassogna uncovered what he called a “dire” budget shortfall just days into the job. Iassogna had taken over after former Superintendent Gary Cialfi took early retirement.

Among the findings were that the school administration had transferred money between accounts without approval from the school board, employed 39 paraprofessionals outside the budget process and paid $50,000 to $100,000 in annual licensing fees for timekeeping software that was never used, the audit revealed.

“How did this go off the rails so much?” Isaac asked. “How in the world was that possible?”

Fellow finance board member Paul Timpanelli agreed, calling the report “the most shocking, disturbing and disappointing document I have ever looked at.”

Whitmoyer said there were a half-dozen items in the report that raised serious concerns for him, including the apparent misuse of special revenue accounts and borrowing money from banks to lease equipment without getting town approval.

“The right people either were not aware or they just went along with it,” he said. “Shocking doesn’t even begin...”

Finance board member Elaine Hammers, though, said she wasn’t surprised by the report. For years, she said, Maria Pires, the town finance director, and town auditor Therese Keegan had requested financial information from school officials and were either not given the information or received it in a format they said was not clear.

“I’m not sure why this comes as a surprise,” Hammers said. “I’m not surprised. I’m not shocked. I’m angry and frustrated.”

Hammers said the most disturbing aspects of the report were the seeming lack of internal controls on a $100 million budget.

“It’s mind-boggling to me,” she said. “They never seemed to come to the realization that controls are important, or that when you give them over $100 million, that controls are required.”

Steven Choi, another finance board member, was among several town officials to question how the schools had overspent some of their accounts and ended up with negative balances at the end of the year.

“How was that even possible?” he asked. “How were no red flags being raised?”

Town council member Kevin Shively questioned which school officials had been responsible for some of the items detailed in the report.

“That’s glaringly missing,” he said. Shively also asked if the town had any recourse to compel cooperation with school officials who had left the district or retired.

In response, finance board Chairman Lainie McHugh said the audit had not uncovered any criminal activity so using legal means to force compliance was unlikely.

“I don’t think there was maliciousness or nefariousness,” she said. “It was a case of ‘this is how we make-do.’”

Whitmoyer said he and McHugh will present the questions raised at the meeting to PKF officials. He said the questions will likely be addressed at the next meeting on Jan. 13.

School officials, including Superintendent Martin Semmel, attended the meeting but did not participate. Whitmoyer said the school administration and Board of Education had seen the report, and there would be additional followup meetings.

“I’m hoping we can meet with them by the end of the month,” he said.

BOE Chairwoman Lucinda Timpanelli confirmed that school officials were reviewing the report and would issue a response. The school board and administration, she said, would work with council and finance board members to implement greater financial safeguards.

“We all work together,” she wrote in a text message.

Whitmoyer also reminded the group that Semmel has only been on the job since September.

“The current administration is not responsible,” he said. “Unfortunately, their responsibility is to begin fixing and resolving (these issues).”

deng@trumbulltimes.com