See You In Court - June 2025

Mr. Superintendent was getting nervous.  The end of June was rapidly approaching, and it was looking like the Nutmeg Board of Education was going to run a deficit when the balloon payments to teachers are made on the last day of school.  Though he dreaded the likely recrimination, he asked Ms. Chairperson to call a special meeting so that he could give the Board members a heads-up.

The special meeting was posted as “Budget Discussion,” but when Ms. Chairperson convened the meeting, Mr. Superintendent urged her to move the meeting into executive session, given the sensitivity of the information he would be sharing.  Ms. Chairperson shrugged and promptly called for a vote to go into executive session.  Despite some quizzical looks from the other members, the Board voted unanimously to go into executive session.

“So what’s so secret that we have to be in executive session?” asked veteran Board member Bob Bombast once the Board members settled in for the executive session.    

“We are projecting a deficit of over $1,000,000, and with two weeks left in the fiscal year, I don’t see how we can end the year in the black.  My bad,” responded Mr. Superintendent.  As Mr. Superintendent had feared, the Board members did not take the news well, and several Board members started talking at the same time.

“Hold on, hold on!” exhorted Ms. Chairperson.  “Give Mr. Superintendent a chance to explain how he got us into this mess and how he is planning to get us out of it.”

With that introduction, Mr. Superintendent launched into a lengthy discussion about the budget.  The main problem, he explained, was unanticipated special education costs.  A number of children with special needs moved into Nutmeg over the course of the year, and the district incurred unanticipated and unavoidable costs for the services they needed.

While the Board members understood that special education costs can be volatile, they were upset that they were just finding out about this problem now, so late in the fiscal year.  Mr. Superintendent explained that he had been making transfers from other budget categories to augment the budget allocation for special education since January, but he was just about out of options because the other accounts were almost completely expended as well.

Board member Mal Content did his best to lighten the mood.  “It is an imperfect world,” he observed.  “If we overspend our budget, what can they do to us anyway?”

Board member Penny Pincher disagreed.  “I went to a CABE Workshop last fall, and running a deficit is strictly prohibited.  Also, Mayor Megillah told me that Board members can be personally liable if we authorize spending in excess of the funds appropriated to the Board.

“Oh, don’t be such a crepehanger,” Mal responded.  “To be sure, Mr. Superintendent should have told us sooner, but we are where we are.  At some point, the auditors will tell us and the Town that we overspent this year.  By that time, it will be water under the bridge.”

Penny Pincher, however, was not having it.  “The law is the law, and we can’t spend more than the budget appropriation.  Mr. Superintendent, do I have to resign from the Board to avoid personal liability?”

“I wish I knew,” responded Mr. Superintendent.

What should the Board members do now?  What should the Board members have done before?

*          *          *

Mr. Superintendent and the Board should have been more alert to the key responsibility boards of education have to monitor the budget over the course of the year.  However, personal liability of the Board members is not a significant risk here.

Conn. Gen. Stat. § 10-222 includes several provisions that apply to this situation.  We start with the understanding that, once the municipality makes an appropriation to the board of education, the board of education has discretion in how it will expend those funds.  However, there are specific procedures that boards of education must follow in doing so.

First, boards of education are authorized by Section 10-222 to make budget transfers over the course of the year, but that is a responsibility reserved for the board of education except in limited circumstances.  The law provides:

[A]ny such board may transfer any unexpended or uncontracted-for portion of any appropriation for school purposes to any other item of such itemized estimate. Boards may, by adopting policies and procedures, authorize designated personnel to make limited transfers under emergency circumstances if the urgent need for the transfer prevents the board from meeting in a timely fashion to consider such transfer. All transfers made in such instances shall be announced at the next regularly scheduled meeting of the board and a written explanation of such transfer shall be provided to the legislative body of the municipality or, in a municipality where the legislative body is a town meeting, to the board of selectmen.

We see that boards can authorize the superintendent or others to make budget transfers, but only in “emergency circumstances.”  Mr. Superintendent’s transfers from other accounts without following these procedures violated the law.

The law also describes when budget transfers are subject to these requirements, stating, “For purposes of this subsection, . . . ‘itemized estimate’ means an estimate in which broad budgetary categories including, but not limited to, salaries, fringe benefits, utilities, supplies and grounds maintenance are divided into one or more line items.”  Accordingly, the administration may make adjustments within large categories of expenditure (as boards are well-advised to define), but budget transfers from one large category to another remain a board of education responsibility.

Had the Nutmeg Board followed this procedure, it would likely have projected a deficit earlier, triggering another provision in Section 10-222.  The law provides that the board of education chairperson must notify the chair of the board of finance (or other appropriating authority) when additional funds are needed, and it further provides that “no supplemental expenditures shall be made in excess of those granted through the appropriating authority.”

 That prohibition leads us to the question of personal liability.  Conn. Gen. Stat. § 7-349 provides that town officers who approve the expenditure of funds without authorization can be personally liable for the expenditure.  However, it is not clear that this statute, which appears in Title 7, Municipalities, applies to boards of education.  In any event, board members are indemnified by statute against personal liability for actions they take in their public service unless such actions are “wanton, reckless or malicious.”  Conn. Gen. Stat. § 10-235.  It is clear, therefore, that board members who act in good faith are not exposed to personal liability, and there are no cases in Connecticut in which board of education members have been personally liable for an over-expenditure.

Finally, as sometimes happens in Nutmeg, the actions of the Board of Education here did not conform to FOIA requirements.  When voting to convene in executive session, public agencies must state the reason or reasons for the executive session, which the Board did not do.  Moreover, “budget discussion” is not privileged to executive session, and the Nutmeg Board should have held this discussion in open session.