SEE YOU IN COURT - March 2020

The Nutmeg Public Schools have had problem after problem with its payroll software for a few years now.  The latest glitch caused a delay of two days in sending out paychecks, which resulted in a visit to Mr. Superintendent from the State Department of Labor and a threat of stiff fines and possible imprisonment for violating the wage payment statutes.

Mr. Superintendent has no interest in spending time in jail, and given the tight budget this year, he knew that payment of fines would be a big problem as well.  So he decided to solve the problem once and for all by buying new payroll software.  With the assistance of the school district Business Manager, whose frustration with the current system was even greater, Mr. Superintendent obtained new software at what he was assured was a great price.

Mr. Superintendent was surprised, therefore, at the angry response he got when he informed the Board by email of his purchase.  Veteran Board member Bob Bombast was first out of the gate with a “reply all” email criticizing Mr. Superintendent’s “rogue” actions.  Board member Mal Content responded to Bob’s attack on Mr. Superintendent in a more moderate tone, but his message was similar – Mr. Superintendent should have come to the Board for approval before making the purchase.  As the emails flew back and forth, Mrs. Chairperson decided to call a special meeting to discuss these matters.

At the special meeting last night, Bob and Mal reiterated their criticism of Mr. Superintendent’s actions, asking where he got the money for the purchase.  Mr. Superintendent started by explaining what a good deal he got, and then he explained that he was able to find the funds for the software by deferring some other purchases and moving things around in the budget. 

Mr. Superintendent’s explanation did nothing to mollify Bob Bombast.  Bob noted the important oversight responsibility that the Board members have, and he told Mr. Superintendent that he should not make any purchases on behalf of the Nutmeg Board of Education without express Board approval.  Then, in high dudgeon, Bob asked, “Well, did you at least go out to bid?  This is a lot of money to spend without doing your due diligence!”

Before Mr. Superintendent could respond, Seymour Dollars, long-serving Chairperson of the Nutmeg Board of Finance, piped up.  “Just exactly when, Mr. Superintendent, were you planning to tell the Town about your impromptu purchase?”  Seymour then went on and on about the need for closer cooperation between the Board of Education and the Town, complaining that the Board of Finance makes recommendations to the Board of Education every year to work with the Town for greater efficiencies, but that the Board of Education simply ignores the Town.

In response to both Bob and Seymour, Mr. Superintendent talked again about what a good deal he got on the software, so good that in his mind bidding wasn’t warranted.  He then reminded the Board members that they have the right, independent of the Town, to expend the appropriation made to the Board of Education in their discretion. 

Does Mr. Superintendent have anything to worry about here?

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Mr. Superintendent and the Nutmeg Board of Education should get on the same page as to appropriate purchasing procedures, and they should pay more attention to the state laws that require communication between boards of education and towns on fiscal matters.  And, of course, they should stop discussion of Board business by email!

We start with the observation that superintendents have broad authority by statute, serving as the “chief executive officer of the board of education.”  Conn. Gen. Stat. § 10-157.  Given such broad executive authority, superintendents certainly have the legal authority to make binding contracts to purchase goods and services on behalf of the school district.  However, boards of education have broad responsibilities for oversight, for enacting policies, and for adopting a budget.  In establishing the budget, boards of education make decisions that allocate resources, and those decisions perforce determine what should be purchased. 

Here, Mr. Superintendent may have been out of his lane by “moving things around” to find the funds necessary to purchase the software.  Conn. Gen. Stat. § 10-222 provides that boards of education may permit “designated personnel to make limited transfers under emergency circumstances [only] if the urgent need for the transfer prevents the board from meeting in a timely fashion to consider such transfer.”  Mr. Superintendent should not be making line item transfers.  Beyond any legal issues, boards and superintendents should establish clear expectations as to their respective roles in the purchase of goods and services.

Section 10-222, cited above, also requires that municipal fiscal authorities make “spending recommendations and suggestions to such board of education as to how such board of education may consolidate noneducational services and realize financial efficiencies” as part of the budget process each year.  While boards of education do not have to accept such recommendations, they must respond in writing whenever they reject such recommendations.

Boards of education are also required to consult with the municipality on various expenditure items, including consultation “when possible regarding the joint purchasing of property insurance, casualty insurance and workers’ compensation insurance.”  Conn. Gen. Stat. § 10-241c.  Directly apropos of the situation in Nutmeg, consultation is also required “prior to purchasing payroll processing or accounts payable software systems to determine whether such systems may be purchased or shared on a regional basis.”  Conn. Gen. Stat. § 10-241c.  And more generally, when a board of education goes out to bid for a good or service and receives submissions and the municipality uses the same good or service at lower cost, it must consult with the legislative body of the municipality and consider a cooperative arrangement with the municipality for the provision of such good or service.  Conn. Gen. Stat. § 10-241d.

Finally, boards should know that bids are required by law only in limited circumstances, e.g., for school building projects and school lunch programs, and there may be charter provisions setting forth bidding requirements.  Other than that, boards of education have the right and responsibility to adopt purchasing procedures that establish for themselves when formal bids must be obtained before a purchase.