Warwick school budget oversight commission finds weak internal controls, $2.18 million shortfall and urges policy changes

A volunteer School Budget Oversight Commission told the Warwick City Council on Wednesday that it found weak internal controls, payroll reconciliation errors and a recurring shortfall that together left the school department with an estimated $2,181,388 deficit for fiscal 2026.

The commission’s chairman, Ernie Almonte, and vice chair Sherry Kuntz presented five months of review and recommended immediate policy and reporting changes to avoid future surprises. “At the end of that process, that resulted in approximately $5,000,000 in additional compensation and related expenses that needed to be added to the fiscal 26 budget,” Kuntz said, describing a reconciliation between HR and payroll listings that uncovered missing payroll-related costs.

The panel said the largest problems were not a single bad decision but systemic: inconsistent payroll reconciliations, poor position control for grant-funded staff, and insufficient budget-to-actual reporting. Those areas together, the commission said, can hide multi-million-dollar timing differences and lead to recurring deficits.

Why it matters: Payroll and personnel-related costs account for roughly 80% of the school department’s budget, the commission said; small data errors or missed reconciliations in those lines quickly escalate into large budget gaps. The panel recommended establishing and enforcing written policies, routine reconciliations, clearer grant‑position tracking and standardized, timely budget-to-actual reports so leaders can spot problems months earlier.

What the commission found and recommended - Payroll and position control: Commission members said they found that HR and payroll rosters did not match, and that lack of a reconciled, single source of truth contributed directly to a $5 million adjustment in the fiscal 2026 figures. The panel recommended a dedicated position‑control process that is reconciled at regular intervals and signed off by finance and HR. - Grants and grant-funded staff: The commission reported that grant funds and the personnel they pay were not always tracked together, leading to continuing positions after a grant expired and producing unplanned permanent costs. Kuntz said the finance director and superintendent have begun building a central spreadsheet that lists each grant, its amount, expiration and whether it funds a position. - Budget-to-actual reporting: The commission urged regular, line‑by‑line budget-to-actual reporting that shows prior-year activity, current-year spending and remaining balances. The commission said current reports were insufficiently detailed to enable early corrective action. - Technology spending review: Commissioners noted Warwick’s technology spending was higher than peer districts and recommended a subscription‑management review and audit of software overlap and underused licenses.

One‑time fixes and future risks Almonte said the city used one‑time insurance fund reserves — $2 million — and opioid settlement funds in the current cycle to reduce the immediate shortfall. He warned, however, that one‑time credits do not address structural problems: “This is recurring expenses and using one‑time money to do that,” Almonte said. The commission highlighted a separate, larger prior shortfall of roughly $5 million from fiscal 2025 that will also need to be addressed in coming years.

Next steps The commission asked the school finance office to produce a formal five‑year plan and said it expects to vote formally on a set of recommended financial policies at an upcoming meeting. The commission also said it supports a performance audit on strategic questions — class sizes, building utilization and program needs — so that any changes (for example, redistricting or program consolidation) would be grounded in outside analysis.

Quotes and attribution: Vice Chair Sherry Kuntz summarized the problem bluntly: “When internal controls are weak or missing, staff are left without the tools they need to manage public resources effectively and transparently.” Chairman Ernie Almonte told the council the commission had found “numerous hours” of staff work and that newly engaged finance leadership enabled the panel to complete its review.

What the council heard next: Councilors asked for documents and for the commission to verify that proposed policy changes are implemented and visible to council members. The panel said it will continue to monitor implementation and provide quarterly updates.

Context and limits: The commission’s work did not change collective‑bargaining provisions or make unilateral staffing decisions; commissioners said their remit and state law limited direct changes to salaries and bargaining agreements. The commission’s recommendations focus on policies, reconciliations and reporting rather than contract terms.

Ending note: The commission said it would provide a formal policy package and the first draft of a five‑year plan to the council for review, and urged staff to prioritize reconciliations and grant‑tracking to avoid repeat deficits.