Officials Question Nauset Funding Request

ORLEANS – The Nauset Regional School Committee is seeking approval from the district’s four member towns to use $250,000 in reserve funding to cover a shortfall in the district’s current operating budget.

Year-end transfers are commonplace. But the process by which the towns were notified about the need for the funding has led to concerns over communications between the school committee and member select boards.

The school committee voted May 15 to ask the member towns of Orleans, Brewster, Eastham and Wellfleet for their support for the use of $250,000 in excess and deficiency funds, or E and D, to cover the shortfall, which the committee said is due to unanticipated costs related to special education. The vote came three days after Orleans’ annual town meeting on May 12. 

In a letter to the member towns dated May 20, the district said the proposed budget amendment would not impact the member towns’ FY25 assessments. But Orleans officials last week questioned the timing of the request, as well as the use of E and D to offset the shortfall.

“I ask, given just a few weeks earlier we met to review the school budget and assessments, when did you know about this $250,000 deficit and why was this not shared during budget discussions as we raised concerns about E and D during our discussions?” Kevin Galligan, chair of the Orleans select board, said during the public comment period of the school committee’s May 22 meeting.

In a follow up meeting on May 27, the select board voted to send a letter to the school committee seeking answers to a number of financial questions, including how the committee arrived at the decision to request the additional $250,000.

“I fully believe that they need it and I fully believe they need the transfer,” Town Manager Kim Newman said. “I just would like to know when they became aware of that, just as a point of clarification.”

In a response to the town managers of the four district towns this week, Nauset Superintendent Brooke Clenchy said administrators notified the regional school committee as early as January that a year-end transfer might be needed to round out the operating budget. But she said the district did not know for certain that a transfer would be needed, and at what amount, until much later in the school year. She said fluctuations in the special needs student population, changing needs for “academic and social-emotional interventions” and "unanticipated changes in state reimbursements” can affect budgets late into the year.

“Amending a budget as we are doing this year usually comes towards the end of a fiscal year when both revenue and expense levels for the year are more certain and the need for, and the amount of, additional monies can be more precisely determined,” she said.

“I don’t think they understand when you make adjustments to your budget, you don’t make them early enough to get them on your [town meeting] warrant,” Judith Schumacher, the school committee’s chair, said May 22. “You make it toward the end of the year when you know what it’s going to be.”

Clenchy also said the process by which the school committee is seeking to amend the FY25 operating budget is in accordance with state law.

“This is the same process that has been used in Nauset in the past, and it is the same process that is followed by regional school districts across the Commonwealth of Massachusetts,” she said.

The member towns have 45 days from the May 15 vote to weigh in on the $250,000 request via town meeting if they choose to oppose the use of the funds. That timetable gives the towns a deadline of June 29 by which to vote. 

Because the four towns have each already held their spring town meetings, that would require that each call their own special town meetings. If no action is taken by June 29, the request to use the E and D funding would automatically be approved.

At the May 27 meeting, Orleans Town Manager Kim Newman indicated that the town likely would not call a special town meeting to oppose the funding.

“You’re going to want to pay that bill,” she said. “That’s not the issue.”

The issue, she and select board members said last week, is the perceived lack of communication from the school committee regarding questions raised over district finances and the committee’s financial practices. 

The select board has raised concerns over the school committee’s use of E and D funds to patch up the district’s operating budget on multiple occasions over the past year. Because E and D funds are used for one-time expenses, the board is concerned about deficits the use of that money could create in the operating budget, where costs carry over from one year into the next.

The district’s operating budget for fiscal 2026 already includes the use of $1.75 million in E and D funds. That figure would increase to approximately $2 million with the addition of the $250,000.

Brewster Town Administrator Peter Lombardi said in an email that Brewster shares similar concerns about the $250,000 request.

“This appropriation would bring that [E and D] balance down to approximately $350K, amplifying our previous concerns about a potential structural deficit for FY27 and beyond,” he said. 

"It's deeply troubling and I'm sorry that we're in this position,” board member Ned Chatelain said.

Lombardi said that despite those concerns, the funding is available for use to supplement the district’s operating budget. 

In a follow up call Monday, Schumacher said while the school committee and the select boards don’t see eye to eye on the use of E and D, there is no “right or wrong,” but rather “a difference in approach” between the two sides.

“That’s what excess and deficiency is for,” she said. “That the ‘D.’”

In her letter, Clenchy maintained that the district’s use of E and D is “consistent with state law and practice.”

“That is, it is used to manage unexpected costs and to reduce the tax burden on member towns,” she wrote.

The $2 million total would utilize almost all of the district’s $2.3 million in E and D funds for the current fiscal year. That was raised as a concern by Orleans select board member Mark Mathison, who noted additional costs that are likely coming due to the delayed completion of the Nauset Regional High School campus reconstruction. That project was due to wrap by the start of the new school year, but he said that deadline will not be met.

“If they have no E and D, how are they going to pay those bills?” he said.

Schumacher said Monday there is no evidence or figures to suggest that the member towns will incur any added expenses related to the high school project.

Meanwhile, Clenchy noted in her letter that the district’s anticipated E and D for the district for the coming 2026 fiscal year is $1.4 million. That figure is in line with the $1 million to $1.4 million the district has had certified for E and D since 2020, she said.

Beyond the specific request, Mathison said there has been a pattern of unresponsiveness from the school committee toward questions raised by select board members, not just in Orleans but from the other member towns as well. In some cases, he said multiple attempts to get answers to the same questions have been unsuccessful.

“Brewster usually has finance committee members at the [school committee] meeting,” he said. “Eastham sends a select board member if they can be there. None of us get answers.” Schumacher said she was unaware of any instances in which questions raised by select board members were not followed up on and addressed. 

Meanwhile, Galligan said the school committee has declined two recent invitations to meet with the Orleans select board in person to discuss the board’s concerns, including the board’s May 27 meeting. Schumacher said in both cases, the school committee was not given enough notice to attend.

“Yes, we were invited to meetings. But it’s not that we’re avoiding them,” she said. “It was very short notice.”

Mathison on May 27 said the select board isn’t trying to overstep in asking questions of the school committee. He deferred to the school committee’s oversight of matters related to things such as educational programming and policy and professional development.

“But there’s an obligation to the taxpayers to make sure that the financing of all those things is clear and open and understood by those of us that need to pay those bills every year,” he said.

On May 22, Schumacher said that the district deserves “the benefit [of the doubt]” from the member towns when it comes to the management of district finances. But Newman said the results of the district’s fiscal 2023 audit, which found some discrepancies in the district’s financial practices, further spoke to the need for financial transparency.

Renee Davis of CBIZ, the firm that conducted the audit, presented the report to the school committee May 22. She said while the district received a “clean audit,” it was recommended that the district improve its practices in select areas, including those relating to inconsistencies in the reporting of the district’s capital assets.

“While these variances did not materially impact the financial statements in fiscal year 2023, failure to address these discrepancies puts the district at risk of material misstatements in the future, which could impact the integrity of the financial statements,” the audit read in part.

 “How can you possibly think that you’re financially secure based on this information and based on that audit?” Newman asked May 27.

Clenchy is set to retire at the end of the month, and the district’s next superintendent, Glenn Brand, is due to begin work July 1. Andrea Reed of the Orleans select board said the transition could potentially allow for a fresh start between the town, the school committee and the Nauset administration.

“I would hope that a conversation with you [Newman], our chair and the new superintendent will happen,” she said last week.

Schumacher, meanwhile, said she is “open to all suggestions” regarding how to strengthen communications with Orleans and the other member towns as needed. 

“I don’t know of any organization or group where communication can’t be improved,” she said. “It can always be improved. And it’s the responsibility of everybody involved, not just one side.”