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Hartford audit may reduce Cromwell reimbursement by roughly $172,000; board to seek counsel and hold executive session
Summary
Finance staff warned the Cromwell Board that Hartford's audit of Open Choice special-education reimbursements suggests districts (including Cromwell) used an incorrect per-student reduction amount; preliminary estimates presented total about $172,000 across three years and the board directed staff to seek outside legal counsel and schedule an executive session.
Cromwell’s finance director told the Board of Education on May 19 that Hartford has completed an audit of Open Choice reimbursements and is alleging that participating districts used the wrong per-student offset when calculating special-education reimbursement. The audit could reduce Cromwell’s final reimbursement this year and retroactively affect three prior years.
Mr. Botelho (finance director) said Hartford’s preliminary calculations changed during discussion but the working totals presented to the board were: $44,000 (2022–23), $64,000 (2023–24) and $64,000 (2024–25), for a combined amount in the neighborhood of $172,000. Hartford has told some districts it intends to withhold contested amounts from the districts’ spring/final reimbursements.
"Our initial informal communication from Hartford indicated we had overbilled them for reimbursement just last year and that we had overbilled them by approximately $132,000," the finance director said; he added that revised calculations adjusted those numbers to the three-year totals above and cautioned that the figures remain preliminary.
Board members pressed staff about whether other districts are affected and how the withholdings would be handled (direct offset of reimbursements versus demand letters). The finance director said many participating districts are in the same position, including West Hartford, Rocky Hill, Newington and others, and that potential withholdings could occur near the end of June when final payments are usually issued.
Because the district’s current counsel has a conflict (represents multiple parties), the administration recommended obtaining separate legal counsel with Open Choice reimbursement expertise, coordinating with other affected districts to share strategy and cost, and convening an executive session on or shortly after the June 2 board meeting to receive privileged legal advice. The board agreed and asked administration to pursue counsel and schedule the executive session.
Administration noted that the district has some contingency in the current budget (finance staff earlier had included a placeholder related to the Hartford issue) and that while the possible reduction is material, staff did not characterize the amounts as budget-breaking. The board asked staff to monitor communications and to report any written demand or withholding immediately.
Next steps: administration will contact potential outside counsel, coordinate with other affected districts, and place an executive-session item on the June 2 meeting agenda (or a June special meeting) to review legal options once counsel is engaged.
