State appoints fiscal monitor to oversee Nutley schools finances

The state Department of Education has appointed a fiscal monitor to oversee Nutley schools' finances and will float the troubled district a loan to balance its budget after a $7 million deficit was announced in March.

A precise amount for the interest-free loan ― to be repaid over 10 years beginning in 2025 ― is not yet established while the department continues to comb through the district's cashflow, according to Superintendent Kent Bania.

Jeanette Makus, a former business official for Passaic and Hudson counties, will assume full control of school coffers as the state appointed monitor. Meanwhile, the board named Belgica Polanco to the role of acting business administrator until officials hire a full-time replacement.

Makus' and Polanco's appointments were announced to the public at the Board of Education's March 7 meeting, when Bania presented what he called a "needs-based" budget for the 2024-25 school year, which unveiled numerous cutbacks and shrewd operational approaches to offset the ongoing shortfall.

“This budget is built on revenues we know are coming in,” Bania said, explaining that projected income and expenditures were verified by the monitor, along with outside consultants and the DOE, leading to a projected $74.2 million in total funds expected for the coming school year.

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But when adjusting the current year's expenses to account for an increase in multiple operating costs, the new budget would require $87.2 million in overhead, which would still lead to a $13 million shortfall. The district said it can close that gap after reducing current spending by $6.7 million, and accounting for a $3 million increase in state aid and a 5.26% increase in the school tax.

A spokesperson said the district could not discuss whether the "administrative restructuring" that was announced by Bania included staff cuts.

School officials uncovered the deficit earlier this year, stating revenues had been "artificially inflated." In the 2022-23 budget, unrestricted miscellaneous revenues had been off by more than $500,000 alone.

An audit report completed Feb. 7 showed district coffers had fallen from just over $9 million to $2.2 million over a year's time by June 30, 2023, officials stated last month. However, years of "unreliable revenue and expense assumptions," alongside rising costs in health care, special education, transportation" and payroll compounded the shortfall.

This article originally appeared on NorthJersey.com: State appoints fiscal monitor to oversee Nutley schools finances