WALDOBORO – SAD 40 residents will get an update Monday on the developing deficit, which has created a whirlwind of controversy since a fiscal year 2002 shortfall was first revealed in January.

Financial specialists working on previous years’ budgets as well as the current and proposed spending plans say the overall deficit may be more than $1 million.

On Monday, Ron Smith of RHR Smith & Co. of Buxton will present the most recent figures he has developed for the district’s actual shortfall, according to a district spokeswoman. The meeting begins at 7 p.m. Monday, March 10, at Warren Community School.

In January, board members learned that the district budget was in the red by nearly $500,000 on June 30, 2002, and that Superintendent William Doughty had not reported that information. Doughty has since resigned. On Monday, the board hired Jerry T. White of North Haven as interim superintendent.

At Monday’s board meeting, Smith provided a written report on recommendations to implement so the district will be in compliance with accounting practices. The district must submit a corrective plan to the state Department of Education by Monday or risk losing federal grant funds.

RHR Smith & Co. recommends that the district’s fiscal department be restructured so that there is a director of operations, accounting specialist, payroll specialist, accounts payable-purchasing specialist and a bookkeeper.

“The chronic problems within the finance department during the past three years, we believe to be a result of the lack of adequate human resource to identify and rectify these problems,” the report states. “We believe the implementation of the above will result in adequate staffing to perform the required responsibilities.”

For each of the positions, the accounting company has outlined job descriptions.

Other changes suggested are to have monthly budget reports prepared and verified by the accounting specialist for review by the director of operations. These reports should contain a balance sheet for all funds, a revenue report and expenditure report for budget to actual figures for all funds.

Smith also pointed out the need to make financial records accessible to all administrators, to update financial software and hardware, revamp its purchase order system and to involve administrators in the budget process.

Concerning computer software and hardware, Smith said, the system already contains two previous years’ financial information, which could be archived, to free up computer space.

The company also urged the district to train all of its financial staff – and when necessary all administrators – on using the software in the finance office.