SOUTHAMPTON — The Southampton Select Board agreed last week to withhold paying its quarterly assessment to the Hampshire Regional School District in response to ongoing challenges in the school district’s business office that are putting the town’s state aid at risk.

That decision, though, is likely to not go into effect, Select Board Chair Christine Fowles said on Friday, because Mickey Buhl, the school district’s business manager, has been granted an extension to get the various accounts in order.

“That’s helpful,” Fowles said, adding that town officials are requesting a similar extension from state officials so the town has more time to reconcile its financial books, an extension expected to be granted Monday or Tuesday.

Also on Friday, the chair of the Hampshire Regional School Committee said that he believes Southampton is not allowed to withhold payment and expects the town to honor its obligations as instructed by Town Meeting voters last spring.

At its Jan. 30 meeting, the Select Board voted 4-0, with member Joy Piper absent, to instruct Town Administrator Edward Gibson to draft a letter to the town treasurer advising that Southampton’s third quarter payment for the school district will not be paid.

The decision to withhold the payment came after Gibson explained that the town is unable to close out the books on the fiscal year 2023 budget, which ended June 30, 2023, because of the school’s problems.

Specifically, the difficulty, he said, is mostly related to reconciling grants for the William E. Norris School, but there have also been issues with the timely submission of payroll from the school.

In turn, these challenges have had a “cascading effect,” preventing town officials from submitting to the state the paperwork for so-called Schedule A reports, including revenues and expenditures, by a Feb. 15 deadline. Missing that deadline could mean that state aid is essentially shut off, based on communication previously received from state officials.

The letter explaining the Select Board’s decision was to be sent to Thomas Cleary Jr., chairman of the Hampshire Regional School Committee; Sean Cronin, senior deputy commissioner of the Division of Local Services; and Jay Sullivan, associate commissioner for district and school finance with the state’s Department of Elementary and Secondary Education.

But in an email Friday, Cleary said the assessment payment wouldn’t be withheld, based on communication with state education and Southampton officials.

“Hampshire Regional High School expects the town of Southampton to fulfill its obligations to the regional school,” Cleary wrote. “At town meeting, the residents of Southampton voted their tax dollars to be used to support the students of Southampton. It is the Select Board’s legal obligation to pay their assessments to the regional high school.”

Cleary added that he has complete faith that the school’s students will continue to receive an excellent education, without disruption, from faculty and staff.

At last week’s Select Board meeting, which included a report from Superintendent Diana Bonneville that covered, in part, the problems in the central office, Select Board Vice Chairman Jon Lumbra elaborated on why Southampton’s assessment shouldn’t be paid.

“On our end, until Norris and the town and Mickey’s office can get straightened out, we can’t close our books,” Lumbra said.

Select Board member Stephen Johnson said it would be fiscally irresponsible to not withhold the assessment payment.

The board suggsted similar actions may be taken by Chesterfield and Goshen, which along with Williamsburg and Westhampton make up the district. The district also provides contracted central offices services to the Worthington School District.

In Chesterfield, Town Administrator Brenda Lessard said the Select Board has expressed concern about the situation with the schools and the business office, though no formal discussions have yet occurred.

Bonneville explained that she and Buhl have been affected by the departures from the administration.

“Most of our time has been spent on HR central business office issues,” Bonneville said, noting that the assistant business administrator, benefit and payrolls person and accounts payable person are no longer working for the district. “Those three vacancies leave a huge hole,” Bonneville said.

This has also meant efforts to catch up on financial matters from last fiscal year. When Buhl began in the position in summer 2023, the district immediately contracted with Mass MuniFin, whose principal is Sara Hunter. Bonneville said that company will continue to help develop structure in the central business office.

Even though Bonneville is stepping down as superintendent this summer, she suggested that Mass MuniFin stay on at least through the end of September, giving it time to submit end of year reports related to the excess and deficiency reports on time. That company will also be needed since Buhl is departing for another job in mid-July.

Bonneville said Mass MuniFin is also being charged with cleaning up grants, which she acknowledged as “a mess,” and hopes to soon close the fiscal year 2023 books for the five districts and for Worthington.

“Longstanding practices from several years have left errors, miscalculations, and it’s not done negligently or spitefully,” Bonneville said.

For quite a while, Bonneville said auditors have recognized the school’s financial practices need to be changed. Making these adjustments, though, has not been easy. “I think it’s just a lot of work,” Bonneville said.

Bonneville said Mass MuniFin’s phased approach, though, is thoughtful and appropriate, and will help the school avoid risking the $280,000 per month in aid coming from the state education department, money that could also be withheld.

Scott Merzbach can be reached at smerzbach@gazettenet.com.