The Pittsfield School District is facing a shortfall of roughly $1 million due to longstanding financial mismanagement, according to interim superintendent Lori Lane.

Lane expressed “serious concern” about the district failing to meet its financial obligations this year. The shortfall is roughly 9% of the $10.9 million budget approved by voters last year.

Administrators have paused hundreds of thousands of dollars in payments to district vendors, though they remain able to pay their employees, Lane told the school board last week. The board and administrators are working with their attorney and the Department of Revenue to determine how to proceed, Lane and board chair Sandra Adams said in a joint interview on Thursday.

Lane, who assumed interim leadership of the district in January, faulted past administrators for a series of financial blunders.

“This didn’t happen overnight,” she said. “This was years in the making.”

Lane said the district had for at least 10 years engaged in a practice called “looping” in which a portion of expenses for a given school year is paid for via revenue raised for the subsequent year. Approximately $1.1 million of the 2024-25 budget was spent on last year’s expenses and the 2023-24 budget was over-expended by $616,000, according to Lane.

Former Superintendent Bryan Lane – who is not related to the interim superintendent – resigned abruptly in November after leading the 500-student district for three years. He cited “personal reasons” for his resignation.

Lane “held a lot of the information and did not share it,” Adams, the board chair, said. “And so therefore, I suppose if truth be known, I don’t think it was the administration who was doing their very best job. I just think that things were being held and not shared appropriately at the very top level.”

Adams said the board also bore “some responsibility” for the situation the district is in.

“We’re well aware that things weren’t run responsibly and that we trusted way over what we should have been trusting,” Adams said. “…We were trying to make demands and they weren’t met and perhaps that might have been one of the reasons that the past superintendent decided to give his resignation.”

Bryan Lane said in a statement that the district’s financial issues preceded him and that he worked hard to resolve them.

“The board was aware of financial issues that existed prior to my arrival. Throughout my tenure, various financial issues were identified and reported to the school board,” he said. “Through changes in personnel and working with representatives from the Department of Education, as well as the division of revenue administration, I worked with the staff to resolve these issues.”

“At all times, my primary focus was to deliver the best possible education to the students of Pittsfield,” he added.

Adams said the district only became aware of the “looping” issue at some point in 2024, and did not grasp the full extent of the district’s financial situation until Lori Lane became interim superintendent.

Among other issues, Adams and Lane said that they discovered the district:

■Under-budgeted for fixed expenses, such as health insurance.

■Proceeded with certain activities under the assumption that they would be covered by federal grants when those grants had not been secured.

■Failed to submit food reimbursement claims on time, resulting in a loss of revenue.

■Sent bills to parents whose children qualified for free lunch.

■Inadvertently signed contracts with at least two employees that led to over-payment of their salaries.

■Had not conducted an annual audit since the 2021-22 school year.

■Did not notify the school board of over-expenditures as is required by district policy.

■Did not provide financial reports to the school board on a quarterly basis as is required by school policy.

Bryan Lane said that he always followed district policies but declined to respond to each issue directly.

Lori Lane, who has worked as an administrator in a number of school districts, said she quickly noticed a variety of “red flags”.

“There were just some sloppy practices that I just don’t know why and I don’t know how … they did some things that they did,” she said.

As the district works to clean up those practices, it also must address the current shortfall it faces. At a meeting last week, district leaders sought feedback from the public about whether to transfer up to $400,000 from next year’s budget to this year’s. Administrators also intend to transfer $125,000 from the district’s special education reserve fund and will hold a hearing next week on whether to transfer $125,000 out of $238,000 available from the district’s fund balance.

Still, a shortfall of at least $300,000 will likely remain. The district is considering two options: borrowing against the revenue it will get next year from the state or holding a special district meeting next fall to ask taxpayers to appropriate more money.

Because of New Hampshire’s school funding model and the fact that Pittsfield has low property values, the town already has one of the highest tax rates in the state.

Debbie Vintinner, a 68-year-old retiree who moved to Pittsfield three years ago, said she is worried about how recovering from the district’s financial situation could impact her own tax bill.

“It will put a damper on possibly buying food, prescriptions,” she said. “It’s bad.”

As Pittsfield works to determine next steps, it will be without a superintendent of any kind in April because Lane will be on leave for the month. She will return for May and June.

The district is just now launching a search for a permanent superintendent at a time when vacancies in other districts have already been filled. Adams said the board delayed posting the job opening because it considered whether to make the superintendent position full-time rather than part-time, which the position has been for the last several years.

“We’ve determined that it probably would be vital with all of the things that we’ve undergone to have a full-time superintendent and perhaps have someone that would stay so that we could have some continuity and be able to move forward,” Adams said.

The district is also waiting on the results of an audit from the Concord-based firm Plodzik & Sanderson, which Lane expects will be completed by the end of the year.

Both Lane and Adams expressed confidence that the district will rectify the issues it faces.

“We’re looking forward to working with the community to get things back on track here in the district,” Lane said. “It’s not going to happen overnight because the problem didn’t happen overnight.”

Jeremy Margolis can be contacted at jmargolis@cmonitor.com.