BROCKTON - The Brockton Public Schools (BPS) faced a significant financial crisis in Fiscal Year 2023 (FY23), stemming from a budget deficit initially reported at $14.4 million and later confirmed to be at least $18 million or $18.25 million. This shortfall came as a shock to parents and the public just before the new school year began in August 2023. Two independent investigations were launched to understand the causes: one commissioned by the city and another by the School Committee.
The findings of both investigations, released in September 2024, consistently point to widespread mismanagement, structural failures, a lack of sound budgeting and financial analysis, and a failure to adequately track spending relative to the budget. However, neither investigation found evidence of fraud, theft, or other criminal acts.
Key Findings from the Investigations:
City-Commissioned Investigation (Nystrom Beckman & Paris LLP / NBP): This comprehensive external independent investigation, ordered by Mayor Robert Sullivan, reviewed millions of pages of documents and interviewed over 30 witnesses, including the Mayor, BPS Superintendent, and School Committee members. The full report, consisting of over 180 pages, was released to the public with no redactions on September 10, 2024.
• Superintendent's Role: The report indicated that former Superintendent Michael Thomas, who had no financial background, was "not a numbers guy" and was wholly reliant on the School Finance Department. He was described as leading with an "iron fist" and making spending decisions regardless of cost or policy, with "no tolerance for dissent". Thomas publicly took responsibility for the overspending, stating every dime was "spent for kids," but legally he was obligated to administer a balanced budget.
• Finance Department Issues: Chief Financial Officer (CFO) Aldo Petronio's financial practices were described as "substandard, antiquated, and lacked transparency". Petronio was seen as a "one-man show" who often yielded to Thomas's spending demands, using "fancy accounting" to balance the budget on paper. Assistant CFO Chris Correia had reported concerns about a potential financial crisis but claimed they went unanswered, later filing a whistleblower lawsuit against the city.
• Budgeting and Tracking Failures: The School Finance Department failed to budget based on actual expenditures and did not track spending effectively. The FY23 budget presented to the School Committee was deemed inaccurate and misleading, reportedly failing to include salaries for approximately 200 employees.
• Transportation Mismanagement: BPS overspent its transportation budget by approximately $6.4 million in FY23, a problem that also occurred in FY22. The decision to bring transportation in-house was poorly planned, lacked adequate analysis, and was not supported by outside experts, despite Thomas's claims.
• Special Education and Out-of-District Tuition: The abrupt decision by Superintendent Thomas to downsize and reprogram the Huntington Therapeutic Day School (HTDS) without sufficient financial planning led to significant increases in unbudgeted out-of-district tuition costs, exceeding $4 million by April 2023.
• Police Details: BPS incurred over $500,000 in unbudgeted police detail costs for traffic control, far exceeding the $60,000 allocated. Superintendent Thomas authorized these details assuming the city would cover them, despite warnings from finance staff.
• Lack of Oversight: The report highlighted a systemic failure of oversight, with the Superintendent, School Committee, City CFO, and Mayor blindly trusting the School CFO and not adequately questioning budgeting methods or spending. The relationship between the city and school department was described as a "deep divide" that was not productive.
School Committee-Commissioned Review (RSM US LLP): This internal financial review, launched in November 2023, delivered its report to the School Committee on September 10, 2024. RSM's work primarily relied on discussions with key personnel and analyzed approximately 200,000 emails and attachments.
• No Misappropriation: RSM explicitly stated that their procedures "did not identify any misappropriation or misuse of funds".
• Budget Entry Errors: The FY23 budget was "originally entered incorrectly into Munis," the city's accounting system, with "approximately 80% of the total budget placed into this one account" (the "199 account"). This created a "pooled cash effect" and hindered effective budget tracking.
• Ignored Warnings: Early warnings about overspending from financial staff were "not acted upon" and "ignored".
• Superintendent's Decisions: Decisions by Superintendent Thomas, such as closing the therapeutic day school and staffing for the community mentor program, were made "without proper analysis or thorough consideration of the potential increase in expenses".
• Uncertainty on Mayor's Knowledge: RSM's investigation was "inconclusive" regarding when Mayor Sullivan was made aware of the FY23 budget deficit, citing "contradictory information". Mayor Sullivan stated RSM did not interview him or the City CFO.
Reactions and Ongoing Challenges:
School Committee members expressed significant disappointment with the RSM report, with some stating they "didn't learn anything I didn't already know" and that it lacked "tangible answers". Concerns were raised about the remote nature of RSM's investigation and the scope of work, with members feeling the contract wasn't for the "detailed audit" they had requested.
Mayor Robert Sullivan acknowledged the thoroughness of the NBP report and outlined steps already taken or planned, including:
• Redesigning the budget process on the school side.
• Enacting new requisition controls and checks and balances between the City CFO and School CFO.
• Creating a transportation steering committee and initiating a transportation audit.
• Recommending merging the financial operations of the school department with those of the city as soon as possible, requiring city ordinances to be amended.
• Engaging a Certified Public Accounting (CPA) firm for periodic reviews of school department processes.
• Asking School Committee members to undergo annual budget and finance training.
• Appointing an ombudsman for anonymous reporting of financial or organizational issues.
Despite efforts, the city continues to grapple with the financial fallout. The BPS spent $7.23 million less than the state-mandated minimum required in FY24, a sum that is now carried forward to the current fiscal year's minimum and was only made available by the city on December 12.
Transportation remains a critical area of concern, with T.J. Plante of Open Architects reporting in December 2024 that transportation was already at 92% of its overall budget for the fiscal year, and bus drivers at 84.6% spent, just 41% of the way through the fiscal year. There is a recognized need for a $6 million special reserve fund, but even that is not enough to cover the potential deficit. The long-standing issue of unpaid vendor bills due to a lack of proper contracts has led to service interruptions, including courier services. City and school officials acknowledge the need to correct past mistakes and establish proper processes, though the complexity is significant.
In a related development, Chris Correia, the former Assistant CFO, settled his whistleblower lawsuit against the City of Brockton. The city agreed to pay Correia $25,263.89 for disputed economic damages, specifically a sick time buyout. As part of the settlement, Correia agreed "never to work for BPS in any capacity in the future". The city denied his allegations but settled to avoid protracted litigation.
Sources include the NBP report, the RMS report, the OpenArchitects report, the Brockton Enterprise, NBC Boston, School Committee recordings, and the separation agreement.
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