PORTLAND — Superintendent of Schools James C. Morse Sr. is finalizing a new procedure for tracking grant money flowing in and out of the schools, an area highlighted by an independent study into the School Department’s $2 million deficit in 2007.

Teachers and administrators have historically applied for grants without informing central office staff, leading to confusion about where certain grants should be directed. That confusion has led to grant funds being deposited into the wrong accounts. 

A report by attorney Bryan Dench into the 2007 deficit indicated that mid-level administrators often had complete information about the grants, but that information was never passed onto the superintendent or the city finance staff. 

“The superintendent and director of finance need to have a good command of all grant funds the department is seeking and upon which it relies,” Dench reported.

The department currently receives a significant amount of grant funding, mostly for Title I funds for low-income areas and special education funds, but Morse said those grants come with strict reporting requirements.

However, smaller grants sought by teachers and building administrators become problematic, especially when those grants are used to pay for an employee.

“It’s a product of the catastrophe a few years ago,” Morse said. “This was one of those places that needed a lot of attention immediately.”

Morse said the new policy will require the superintendent to sign-off on all grant applications. Those wishing to apply for a grant must submit a grant proposal to the superintendent, including the grant source and proposed use. Since many grants require a local match of dollars or in-kind services, the proposals must include that information as well.  

“Too often, someone is applying for a grant that central office is unaware of,” Morse said. “If a grant meets the district’s needs and doesn’t require a dollar for dollar match, they’ll get the green light.”  

If the grant is approved, Morse said the money will be placed into its own grant account, which will be supervised by a central office accountant and the grant administrator, creating accountability. 

Meanwhile, the department still has some work to do to close out some outstanding grant accounts, some of which have a negative balance.

As of Sept. 3, the department was expecting to have about $765,000 in excess revenue. Also, another $1 million payment in taxes collected by the city is expected to be put into a fund balance for the schools.

However, it’s unclear how long that account balance can be maintained. Not only are there unresolved grant accounts, but the schools owe the city $1.8 million towards debt incurred by the 2007 and 2008 deficits.

City Finance Director Ellen Sanborn said city and school officials will take definitive action on the outstanding grants this year. Estimates on how much it will cost to reconcile the old grant accounts vary from $200,000 to $500,000. 

“It’s been three years since we’ve been dealing with this (grant issue); we’re going to make some decisions,” she said. “Hopefully this will be the last discussion.”

 

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