Inspector General Finds “Critical Failure of Leadership” Led to Brockton Schools’ $18 Million Budget Crisis
BROCKTON - December 3 - Massachusetts Inspector General Jeffrey S. Shapiro released a scathing review today finding that a “critical failure of leadership” by Brockton Public Schools administrators, the school committee, and Mayor Robert Sullivan allowed an unprecedented $18 million budget deficit to develop in Fiscal Year 2023, with officials ignoring clear warning signs for months while overspending continued unchecked.
The Full Story
The Office of the Inspector General’s review, released December 3, identified systemic failures at every level of budget planning and oversight that allowed Brockton Public Schools to spend $18 million more than it had available during FY23. Inspector General Shapiro’s findings paint a picture of repeatedly ignored warnings, unrealistic planning, and a fundamental abdication of fiduciary responsibility by those entrusted to manage public funds.
“The unprecedented FY23 BPS deficit was caused by a collection of failures to properly plan the BPS budget, monitor spending, and respond to clear warning signs,” Inspector General Shapiro wrote in the letter released today. “The OIG cannot overstate the fact that a failure of leadership by key BPS leaders allowed this fiscal crisis to occur.”
The Inspector General’s review found that BPS leadership built its FY23 budget on unrealistic enrollment projections, setting the stage for the crisis. When actual enrollment fell short of projections, the district received less state aid than anticipated due to the state’s enrollment-based funding formula. Despite this fundamental revenue shortfall, spending continued at unsustainable levels.
Perhaps most damning, the review found that BPS finance staff identified and reported problems as early as July 2023, alerting leadership that expenditures for out-of-district tuition, transportation, and contracts were increasing beyond budget projections. However, the OIG “could not find any evidence that these concerns from budget office staff were elevated from the CFO to the superintendent, nor was there evidence that based upon these reports that the superintendent took appropriate action to curb spending or control the budget.”
Instead of addressing the warnings, overspending accelerated. “This pattern of overspending continued over the following months without any acknowledgement or action on the part of BPS senior leadership, including the superintendent,” the review states.
The school committee, which received monthly budget reports clearly showing expense line items exceeding projections, failed to discuss or attempt to address the mounting deficit. While some school committee members reportedly lacked finance or accounting backgrounds, Inspector General Shapiro rejected this as an excuse.
“The budgetary fiscal cliff facing the BPS was so significant it should not have required any specialized budgetary or accounting acumen to fully understand the scope of the problem and the urgency to act,” Shapiro wrote.
The review found that Mayor Sullivan, who serves as school committee chair, along with other school committee members, the superintendent, and the CFO all violated their fiduciary duty to BPS, the city, and Brockton residents. “State finance law is simple,” Shapiro emphasized. “Government entities may not spend more dollars than they have available, regardless of any rationale for doing so, no matter how noble.”
The Inspector General cautioned that the measures ultimately implemented by BPS leadership in FY23 “were not strictly enforced and were not proportionate to the scale of the deficit,” suggesting that even belated attempts to address the crisis fell short of what was needed.
The OIG made seven specific recommendations to establish fiscal policies and practices ensuring every individual involved in budget preparation and oversight understands their roles and can be held accountable. However, Shapiro expressed skepticism that new laws or regulations alone could prevent similar crises.
While the city is considering seeking amendments to Chapter 324 of the Acts of 1990, legislation that imposed additional controls over Brockton’s finances, Inspector General Shapiro believes the problem runs deeper than what statutes can address.
“Ultimately, this crisis occurred because the people entrusted to manage the public’s money - school committee, the superintendent and the mayor – failed to understand their basic responsibilities,” Shapiro said, adding, “No law can ensure that city and school leaders read reports, and act upon such information.”
The OIG’s review focused on identifying the lapses in individual roles, responsibilities, and financial controls that contributed to the deficit, rather than analyzing the deficit amount itself, which has been thoroughly examined in multiple previous audits.
Key Findings
Unrealistic Budget Planning: BPS leadership built FY23 budget on enrollment projections that proved significantly inflated, resulting in lower-than-expected state aid.
Early Warnings Ignored: Finance staff alerted leadership in July 2023 about overspending in out-of-district tuition, transportation, and contracts. No evidence these warnings were elevated or acted upon.
Continued Overspending: Despite warnings, spending pattern continued for months without acknowledgment or action from senior leadership including superintendent.
School Committee Inaction: Monthly budget reports showed line items exceeding projections, but school committee did not discuss or address mounting deficit.
Fiduciary Duty Violations: Inspector General found BPS CFO, superintendent, school committee members, and mayor violated fiduciary duty through inaction.
Inadequate Response: When measures were finally implemented, they were not strictly enforced and were not proportionate to the deficit’s scale.
Fundamental Leadership Failure: OIG characterized the crisis as resulting from failure to understand basic responsibilities by those managing public money.
OIG Recommendations
The Inspector General made seven specific recommendations for the city and BPS to establish fiscal policies and practices ensuring accountability:
Set a “tone from the top”: Adopt budget management best practices and adhere to budget policies in place.
Establish a culture of accountability: Encourage individual and collective action in bringing budgetary concerns to city leadership, BPS leadership, and the school committee.
Require specialized training: Mandate that the school committee and BPS personnel holding budgetary responsibilities, including the superintendent, BPS CFO, deputy BPS CFO, and other finance staff, complete training on their fiduciary obligations.
Ensure budget literacy: Ensure that the school committee and BPS finance staff understand the BPS budget cycle and how to read and analyze budgetary documents.
Strengthen controls through clear fiscal policies:Create or amend existing fiscal policies to clearly define roles and responsibilities of all parties in budget preparation and administration; establish reporting structures and procedures for raising budgetary concerns with alternative paths if concerns remain unaddressed; specify circumstances requiring the BPS CFO to report material budget changes to the school committee and mayor; and develop clear escalation paths when budgetary concerns go unanswered.
Review and reform contracting processes: Review current BPS contracts to ensure proper procurement and appropriate encumbrance of funds, and establish a written process to similarly account for future contracts.
Mandate OIG training for school committee members:Require all current and future school committee members to complete the “Boards and Commissions: Know Your Responsibilities” training offered by the OIG Academy within the first 30 days of their tenure.
The city of Brockton and BPS have 45 days from receiving the letter to notify the OIG in writing of their plans to implement these recommendations or actions already taken.
The full letter is available at https://www.mass.gov/doc/brockton-public-schools-fy23-18-million-budget-deficit/download