Auditor puts Monroe schools on fiscal watch

Proposal submitted to the state didn’t erase current, future deficits.

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By Steven Matthews, Staff Writer 10:16 AM Friday, February 3, 2012

MONROE — The Monroe Local School District was placed on fiscal watch Thursday by the state auditor’s office.

Projected deficits for fiscal year 2012 and fiscal year 2013 prompted Ohio Auditor Dave Yost to take that action. The Ohio Department of Education placed Monroe on fiscal caution Oct. 1.

“These are undoubtedly tough times for the Monroe Local Schools that will require difficult decisions,” Yost said. “I encourage the district to utilize every tool available to chart a path back to fiscal health.”

The ODE notified the state auditor’s office that Monroe failed to submit an acceptable proposal to correct conditions that prompted the fiscal caution declaration. The ODE then asked that the district be placed on fiscal watch.

The auditor’s office reviewed the district’s five-year forecast submitted Oct. 26 and determined that the ODE’s request was reasonable. The district’s five-year forecast includes deficits of $1.6 million for fiscal year 2012 and $2.7 million for fiscal year 2013.

“Your proposal has to bring the district back into the black, and if your proposal doesn’t do that, your proposal will be denied,” school board President Brett Guido said. “We can’t submit a proposal that can’t cover the deficit that we currently show on our books. We knew the proposal would be denied.”

Monroe — which has an annual budget of about $18 million — has a projected $4.5 million deficit by the end of this fiscal year: $3.1 million from the Bond Retirement Fund and $1.4 million in operating expenses.

The school board approved $2.2 million in cuts in late November, and that was submitted to the ODE as part of the district’s recovery plan. About $635,000 in cuts have been made in the past year.

“We’ve anticipated this,” Guido said. “We certainly were not looking forward to it, but we’ve known this is part of the process to get us out of the situation we’re in.”

Four community meetings have been scheduled Tuesday, when more information on the $2.2 million in cuts will be shared.

The times are 8 a.m., 11 a.m. and 2 p.m. at the board office, and 6:30 p.m. in the auditorium. Staff meetings will be held Monday. The $2.2 million in cuts will be effective in July.

Superintendent Elizabeth Lolli revealed last month that 19 positions will be eliminated next school year as a part of the cuts.

Also last month, the Monroe board submitted a letter of professional misconduct to the ODE office detailing the actions of former Treasurer Kelley Thorpe, who now holds the same position with Middletown City Schools.

Within 60 days of Thursday’s declaration, Monroe must submit a financial plan to eliminate the current deficit and avoid future deficits. The ODE has 30 days to accept or reject that plan. If rejected, it can recommend modifications to make the plan acceptable.

Fiscal emergency is the next step if Monroe fails to submit an acceptable recovery plan within 120 days or fails to submit an updated recovery plan when one is required, according to the ODE’s website.

If that happens, a financial planning and supervision commission would be appointed to ensure a balanced budget. Within 120 days after its first meeting, the commission would then adopt a financial recovery plan to be reviewed by the ODE.

Contact this reporter at (513) 755-5113 or steven.matthews@coxinc.com.

Monroe schools  community meetings

When/Where: Tuesday, 8 a.m., 11 a.m. and 2 p.m. at the board office; 6:30 p.m. in the auditorium

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