Fiorentini, who is also the School Committee chairman, said hiring an outside agency to review the school budget is the only way to satisfy bond-rating agencies that the city has a handle on school spending.
“Moody’s was concerned about the school overrun, but they didn’t downgrade us because we told them we were putting in these controls,” Fiorentini said yesterday. “This study is critical.”
Moody’s is one of the firms that sets the city’s bond rating, which determines how much interest the city pays when it borrows money.
Scully said the purpose of the upcoming financial review is determine whether the city has budgeted the correct amount of money to pay its expenses and financial obligations.
“I want them to review what we spent last year for specific needs and expenses and make sure we budgeted that amount this year, so we don’t have to patch holes at the 11th hour again,” Scully said. “The idea is to manage our costs rather than reacting to expenses.”
Scully acknowledged he’s not sure if there’s enough money in the $61.5 million school budget and whether the funds are allocated in the right places.
“That why we are doing the financial review,” he said.
According to the specifications of the study, the purpose is to “review prior years actual expenses including the growth of special education ‘out of district’ tuitions and the current year’s salaries’ encumbrances to determine the adequacy of the FY 2014 budget and revolving account expenses and revenue.”
The Melanson Heath & Company proposal said it will provide “conclusions as well as recommendations for improvement.” The firm has also offered to meet with school officials to provide assistance in implementing any recommendations it makes.
The company, which Haverhill has used before for financial audits of city financial procedures in the past, has extensive experience in performing operation audits and reviews, according to its proposal.