Danbury School District finance update shows multi‑million surplus, prompts tighter controls and reliance on grants

Danbury School District finance staff on Tuesday reported a materially improved but still “fluid” picture for fiscal 2024 and for the current year, flagging an $9.4 million–$11.1 million range of favorable results in the audit work, large bookkeeping cleanups that moved several million dollars in salaries between funds, and continuing reliance on grants such as Alliance and ARPA to cover operating needs.

The update matters because the district will present its budget request to the city this week with lingering questions about sustainability: staff said a combination of one‑time ARPA and Alliance grant money and a recent pharmacy rebate depressed net benefit costs this year, while coding and reconciliation problems in previous years hid the district’s true position.

Finance director Michael (Mike) Weaver opened the board discussion with the month‑ending March 31 report and a reconciliation showing the year‑to‑date expenditures and projected balance. Weaver said March was a “very typical month” with two payrolls and month expenditures just over $14,000,000; year‑to‑date expenditures were presented as roughly $100.7 million. He said the district’s projected current balance “is projected to be 1,800,000” but that the figure has changed as the finance office reclassified staff and completed other entries.

Weaver said staff moved “just over $5,000,000 in movement in salaries” between the general fund and the Alliance grant after a multi‑step review of where employees were charged. He described the adjustment as part of an ongoing cleanup that has moved roughly 50 individual positions so far, and he said some charge codes and location assignments still need a “once over.”

Weaver and other staff described a set of causes behind swings in monthly statements: (1) coding and charge‑code errors when staff names and locations were not aligned between eGMS and the district’s Tyler financial system; (2) timing and reconciliation of self‑insured health and dental expenses, which are processed weekly via EFTs; and (3) purchase orders that stayed open in the system but had no matching invoices or activity, including one $1.4 million PO that Weaver said he backed out because “nothing ever came to fruition.”

Weaver said bank reconciliations were not being completed reliably in prior years and that the district is now using outside accountants (CLA) to bring bank accounts and other balance‑sheet reconciliations up to date. He listed remedial actions that finance has begun implementing: weekly benefit reconciliations with the broker, closing stale purchase orders, requiring backup documentation for journal entries, creating a month‑end closing calendar, and considering purchase‑order approvals and multi‑signature limits for high dollar amounts.

Superintendent (staff member) Cara (first name used in meeting) told the board the work to align grant coding and charge locations has already produced more accurate visibility. "We had to find the bottom to see where we are," Cara said, adding the district now has better real‑time visibility than a year ago. Cara urged caution about treating one‑time dollars as recurring and said the Alliance grant will be used to staff the new high‑school satellite (DHS West) and related strategies, leaving less room to finance other interventions.

Board member Richard (Rich) Janelli pressed staff on the size of the adjustments and on whether corrected coding would prevent future large swings in reported balances. "When you publish financial statements and we have swings from a $9,000,000 positive balance down to $2,000,000 and we say it's attributed to coding differences, we have to have a better handle on the mechanics of the coding," he said.

On grants and special items: Weaver said the district has roughly $7.7 million (reported earlier in the meeting) in ARPA allocations pending city reimbursement paperwork and that he has $1,010,000 in ARPA requisitions he expects the city and its outside reviewer to approve and return within about a month. Staff also said the Alliance grant (described repeatedly in the meeting as the primary grant vehicle for staffing the DHS West academy and other strategies) is volatile because the district has reprogrammed staff and one‑time positions into it; unused Alliance money generally must be returned.

On insurance, Weaver said the district is self‑insured for health and dental and that broker Gallagher provides an estimated cost; he noted pharmacy rebates from Cigna are a material but variable offset. Weaver said the district received a pharmacy rebate of about $1.6 million this year (compared with about $888,000 the prior year) and that the rebate is not guaranteed, so staff do not include it as a recurring budget item until it’s booked. "It is not guaranteed to us," Weaver said of the rebate.

On the 2024 audit reconciliation, Weaver said audit work shows a $9.4 million surplus that he described as “very fluid,” and on a follow‑up slide he summarized an adjusted figure of about $11.1 million in excess of a roughly $150 million budget (he characterized the latter as about 7.4% favorable in the audit work). He cautioned the board the numbers will continue to be refined as auditors and staff complete entries and reconciliations.

Board questions focused on two recurring themes: (1) how to avoid recurring surprises in the published monthly statements, and (2) how to manage next year’s budget given reliance on one‑time grant money. Several board members suggested adding a one‑page key or footnote on monthly statements that explains large offsets, offsets located in other line items, or anticipated receipts such as pharmacy rebates and ARPA reimbursements.

Staff described process changes aimed at preventing repeats: weekly reconciliation of benefit EFTs, periodic printed review and closure of stale purchase orders, centralizing invoice routing options, a formal month‑end closing calendar, and improved documentation on journal entries inside Tyler. Weaver also said he plans to request additional finance staff focused on purchasing to separate accounts‑payable from purchasing duties.

On the district’s upcoming presentation to the city, Cara told the board the district still expects to request additional funds (the district asked historically for roughly $34 million in programmatic needs), but that available ARPA, remaining one‑time funds and the Alliance allocation reduce near‑term flexibility. "We will have to figure out where to get that other $9,000,000," Cara said, referring to a gap between internal asks and projected available grant/ARPA sums; she said transport, out‑of‑district tuition, and contract negotiations are the highest uncertainty drivers.

Board member Michelle asked whether the district can assure the public it will not seek a similarly large percentage increase in future budget asks. Cara and Weaver said it is premature to promise a specific figure for the 2026–27 ask, but both said the 2025–26 year is unusually large because of startup costs for the DHS West academy and because several contracts remain unsettled. Staff committed to producing a multiyear projection once numbers stabilize.

The meeting closed after routine business; a motion to adjourn was made and seconded and the board adjourned.

Ending: District leaders told the board they will proceed with tightened reconciliations, purchase‑order controls and clearer monthly disclosures ahead of the city budget presentation. Staff said the financial picture has improved materially since earlier in the year but remains subject to audit adjustments and the scheduling of grant reimbursements.