The decision by the Niles Board of Education to bring the hammer down on the district’s treasurer, Lori Hudzik, for not doing her job suggests that members have finally come to terms with the reality of state-declared fiscal emergency.
Last week, the board voted to place Hudzik on “an unrequested leave of absence” on the grounds that her financial record-keeping was inadequate.
School board members, aware that the state-mandated Financial Planning and Supervision Commission has been unhappy with the district’s response to the emergency, could make Hudzik’s leave permanent.
But it isn’t just the decision by the school board to cut the treasurer loose that’s deserving of praise. Members voted to hire a certified public accountant with experience in public finances to replace Hudzik.
Lori Simione, who serves as treasurer for the Trumbull County Educational Service Center, was appointed “treasurer pro tempore” for the Niles schools system. Her compensation of $300 a day will be paid to the educational service center.
“This will allow us to move forward with a fully functional treasurer’s office,” said Superintendent Ann Marie Thigpen.
It’s worth remembering Thigpen was taken to task about a month ago by the state commission for spending money without authorization.
We opined that the flare-up during the commission meeting highlighted the fact that the administration had yet to understand the ramifications of fiscal emergency. The declaration has necessitated a change in the way the district operates.
Recently, the commission sharply criticized Treasurer Hudzik for failing to do her job. That criticism led to her being placed on leave.
We’re pleased that Thigpen had conversations with the chairman of the commission, Bob Foss, and member Giovanne Merlo before the board decided to hire Simione. Merlo is Niles city auditor.
The school district has been in fiscal emergency since February. As a result, all budgeting and expenditures are subject to commission review and approval.
In addition, the panel will oversee the development of a five-year financial recovery blueprint that provides for a balanced budget each year. It must be approved by the state before the emergency is lifted.
There’s a compelling reason the superintendent and the school board need to establish a close working relationship with the budget overseers: They must show residents they’re committed to quickly putting the school district on a firm financial footing. In May, voters in the district turned a blind eye to the district’s fiscal problems and rejected a 5.6-mill, 10-year property tax renewal.
Despite all the publicity surrounding the extraordinary step taken by Ohio Auditor Keith Faber in declaring the emergency, approximately 1,700 voters let it be known in the May 7 primary that they weren’t buying the doomsday scenarios.
Around 1,600 voters approved the levy, which may bode well for the issue when it again appears on the ballot – this time in the November general election.
The clashes between financial planning commission members and the school system’s administration make clear there needs to be no doubt as to who’s calling the shots..
In May, for instance, commission members verbally lashed Thigpen for issuing purchase orders and implementing personnel changes without prior authorization.
Under the emergency declaration, no purchase orders above $5,000 are permitted unless the commission approves them.
Given that school board members and the superintendent bear responsibility for the district’s fiscal collapse – they failed to make the tough decisions to erase the red ink in the budget – the need for state-mandated oversight is clear.
When state Auditor Faber declared the emergency, budget projections revealed six- and seven-figure deficits for the next five years.
In light of such a record of inaction, it seems inconceivable that no one was paying closer attention to the embattled treasurer, Hudzik.
According to what the state-appointed fiscal supervisors told the oversight commission, Hudzik had been unable to reconcile bank records and to keep financial records current. Both are required by the state.
Now, with Simione on the job, the prospects of the ledgers being in order have greatly improved.