Shelton BOE Surplus Money Questioned

The boards of education and aldermen are at odds over money again, but this time the city’s auditor says they better hash it out before it gets even more muddled.

During his 2010-2011 fiscal year audit report, David Cappelletti pointed out that the has $212,000 in a reserve fund to be spent on dental insurance as needed.

He said that, although set up well and in an organized manner, the account poses a miscommunication issue down the road, and is difficult to audit going forward.

“In my experience, reserve funds are often set aside and then not touched and it can get confusing about its original purpose,” Cappelletti said. “I can see five or six years down the road, the BOE needing and using this money and the aldermen not seeing where it came from.”

So, where did it come from, anyway? BOE Finance Director Al Cameron explained that because last year was the first year the BOE was self-insured for dental, they were unsure of how to budget for it and ended up with the surplus.

“I suppose the city [has control of the money], but the cash account itself is at the BOE so they could spend out of that account and the aldermen would never know,” Cappelletti said. He suggested that the aldermen and BOE address the issue of authority sooner rather than later.

Cameron said the BOE made a resolution to open the reserve fund after reaching out to other self-insured education boards about risk reduction.

Mayor Mark Lauretti was not convinced that this entitles them to control of the money. “The BOE has a long history of establishing resolutions then changing them,” he said.

Cameron said the reserve fund could provide a security net in the future. “The day is going to come when we’re going to have a not-so-great claims experience.”

He also ensured that the money will not be used for purposes other than dental insurance overruns. “This money is at Wells Fargo, the city’s primary depository. It isn’t sitting in a bank in the Cayman Islands or anything.”