$1.1 Million Penalty Against The City Of New Britain Has Been Eliminated

April 14, 2004

COOPERATIVE EFFORT BY MAYOR STEWART AND BOARD OF EDUCATION SAVES $1.1 MILLION PENALTY FROM STATE DEPARTMENT OF EDUCATION.

Because of effective action taken by New Britain Mayor Timothy Stewart and the cooperation of the City's Superintendent of Schools and Board of Education, the $1.1 million penalty against the City of New Britain imposed by the State Department of Education has been eliminated.

According to initial findings by the State Board of Education, it appeared that New Britain had failed to spend the targeted state Minimum Education Requirement (MER) by $554,409 in the 2002-03 Fiscal Year. The penalty assessed for an MER shortfall is $2 for every $1 under the MER.

The mayor, not willing to let the city pay the penalty without first exploring all avenues of relief, called on city auditors, Scully and Wolfe, to research what options the city had to deal with the threatened penalty. A review of the New Britain Board of Education's expenditures/revenues discovered that Medicaid funds coming into the BOE were not spent on special education costs but rather on MER eligible expenditures.

The city auditors met recently with representatives of the State Department of Education and were able to reach an agreement that will allow the city to amend its annual filing to count the use of the Medicaid funds toward the city's required MER, thereby avoiding the penalty.

"I am very pleased that through swift and determined action, and with the cooperation of the Board of Education and school administration, we were able to avoid a penalty of over $1 million and a resulting increase in taxes for the citizens of New Britain," Mayor Stewart said today.

"By calling in our auditing firm, we were able to discover an inconsistency in the state form which could have proven quite costly to the city."

Continuing Stewart said, "I want to thank officials of the State Department of Education for their cooperation in this matter. By working closely with SDE and other state agencies, we have been able to make progress on behalf of our city and its taxpayers.

"I also want to commend the members of the Board of Education for having the foresight to work with us on this effort to save the taxpayers of New Britain $1.1 million that we will not have to pay in penalties.

"It has been my hope from the start that we could build a better working relationship between the mayor's office, the Board of Education and the school department to provide our students with the best education possible without any of the bickering and conflict that we had seen in recent years."

"This cooperative effort shows clearly that we can all work together in a more productive manner to provide quality education for our students and, at the same time, protect the interests of our taxpayers in New Britain," Stewart concluded.