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Gregory Rec/Staff Photographer2006
OCT. 6: City auditors issue a report highlighting problems in the School Department's accounting that "lends itself to errors going unnoticed."
2007
MAY 3: Portland city councilors learn that school officials did not cut $500,000 from the $82 million 2006-07 budget as ordered. The money was used to hire 25 additional people.
MAY 4: Superintendent Mary Jo O'Connor says she instituted spending controls in February and expects the budget to reflect the $500,000 reduction by June 30.
ON OR ABOUT MAY 10: According to the city's financial administrator, Paul Colpitts, he notifies the School Department's business manager that there is an estimated $2.4 million deficit in the 2006-07 budget.
JULY 10: Calling it "regrettable but unavoidable," O'Connor announces that the school department overspent its budget for the previous year by $1.7 million.
JULY 13: School officials warn that the 2006-07 budget deficit may climb as high as $2.5 million after auditors complete their review this fall.
JULY 17: City and school officials agree on a plan to reconcile the previous year's budget deficit and to institute a budget review process. The School Department deficit will be covered by the city's reserve fund. Dipping into the reserve fund might endanger the city's bond rating, unless it can show that there is a plan in place to prevent future deficits.
JULY 30: Portland schools' finance director, Richard Paulson, resigns.
AUG. 1: The Portland city manager and school superintendent agree to have the city finance staff take over management of the school budget, at least in the short term.
The plan assigns the bulk of financial management responsibilities to the School Committee and city administration, which took over the School Department's finance office last week after School Finance Director Richard Paulson resigned.
O'Connor pitched her plan as a way to improve financial oversight of Maine's largest school district. Her admitted lack of financial expertise has come under fire in recent weeks as Portland deals with an estimated $2.5 million deficit in the 2006-07 school budget.
The committee spent more than an hour discussing aspects of O'Connor's three-page written proposal, which centers on making sure the nine-member panel gets a variety of financial reports regularly and on time in the future.
No committee member questioned the new job descriptions that O'Connor outlined for herself and the committee in the plan, which she unveiled during a workshop meeting at Portland Arts and Technology High School. No public comment was allowed.
O'Connor said "appropriate use of core competencies" would be a potential benefit of permanently combining city and school finance offices, a consolidation that is under consideration.
After the meeting, O'Connor said she used "competencies" to mean duties or responsibilities.
"It is my core competency, under the direction of the School Committee, to articulate educational policy, design programs and educational infrastructures to implement this policy, and the allocation of resources to manage educational programs and infrastructures," O'Connor read from her plan.
"It is the core competency of the School Committee," she continued, "to evaluate and approve the financial appropriateness of educational policy and program requests, ensure the allocation of financial resources to approved requests, and then to manage and monitor expenses and revenue associated with education."
After the meeting, O'Connor said that she did not intend to exclude financial management duties from her "core competencies."
Several committee members acknowledged that they hadn't read the "core competencies" closely, and described O'Connor's plan as a work in progress.
"This is a draft document," said John Coyne, chairman. He said O'Connor's plan could be brought up at a future business meeting, amended as committee members see fit and approved as an action item.
Other members questioned whether O'Connor's plan is premature because the committee has agreed to hire a lawyer to investigate how the deficit happened, and city finance officials haven't completed their review of school finances.
"It feels like we're putting the cart before the horse," said Ellen Alcorn. "This frankly feels like a PR (public relations) event."
Alcorn said she believed the committee should focus on developing a plan to address the deficit and further reduce the current budget, which the committee had difficulty doing this past spring.
Lori Gramlich again raised the specter of holding O'Connor accountable when her $112,000 annual salary comes up for review in the fall. The law and O'Connor's contract, which runs through June 30, 2010, require the committee to investigate, find cause and give due notice before dismissing her.
The city's finance staff is working to reconcile all spending and revenue in last year's $82 million school budget and assess the validity of the $85.7 million school budget that took effect on July 1.
By the end of next week, city officials are expected to have a firmer number for the school deficit, as well as an accounting of any overspending by other city departments during the fiscal year that ended June 30.
At this point, the school deficit includes $1.7 million in overspending that started shortly after the City...
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