Arlington is to get $490,929 of the $204 million in a federal Education Jobs Fund announced by Gov. Patrick on Wednesday, Aug. 25, a news release from Superintendent Kathleen Bodie says. The governor's news release put the amount at $396,742.

Offsetting that welcome news, Bodie reported that the schools face a $1.5 million shortfall as the beginning of the new school year nears.

A combination of state and federal money totaling $4.07 billion is to ensure that all school districts receive more state aid, at least $25 per student, than they did last year, and that per-pupil boost will be the case in Arlington. 

The new funding, which follows the announcement that Massachusetts secured $250 million in federal Race to the Top dollars, will support an estimated 2,700 teaching positions. 

Reacting to the news, Joseph Curro, chair of the Arlington School Committee said in the news release, "I am very pleased that the Federal government has recognized the position that local school districts find themselves in and that the Congress and the President have seen fit to extend this relief. While this is no magic bullet, this assistance will help to make a very tough time a little easier."

Curro said that he expects the School Committee to review administration proposals for use of the new funds when the committee meets Thursday, Aug. 26. 

Even as they prepare for a very difficult year in fiscal 2011, leaders of the Arlington public schools continue working to reconcile the effects of numerous financial shocks in fiscal 2010. 

Early last year, the news release from Bodie says, in the wake of the national recession, school officials feared a revenue gap of up to $2.6 million, as the state sharply curtailed local aid, grant and other credit revenue declined, and the district faced unanticipated costs for out-of-district special education placements. 

As the magnitude of this problem became apparent, the release says, measures were immediately taken to implement a freeze on less crucial expenses and to implement strict purchase order controls. These efforts succeeded in achieving $1.1 million in savings without midyear teacher layoffs. 

Despite best efforts, the school district has been left with a $1.5 million shortfall as officials work to close the books on fiscal 2010, the release says.

What's behind the gap? 

Part of this gap is a result of late payments of grants and fees to the district, the release says. These revenues were received after the close of the fiscal year, and the School administration is working with Town officials on cash management measures to address this issue. Some of these measures will likely require action by a Special Town Meeting in the fall. 

Arlington public schools leaders are proposing to address the remaining portion of the shortfall though savings in the FY11 budget, which will be available due to conservative estimates of grant, fee, and credits revenue as well as savings through continued tight financial controls. 

Discussing the situation, Bodie said in the release, "The volatility of out-of-district special education costs always presents a challenge in any year, but an $800,000 increase in out-of-district costs coupled with $1.8 million in lost revenue created an enormous strain on the school department last year.

"Every measure to save money was taken, short of laying off teachers midyear, which would not have been in the best interest of children. Going forward, our experience last year underscores the importance of planning for the volatility of special education costs when developing the next multiyear fiscal stability plan."

Even as activity continues to resolve lingering issues from fiscal 2010, Arlington schools' Chief Financial Officer Diane Fisk Johnson is rolling out a major initiative to improve the tracking of all school district revenues, salaries, and other expenses.

These efforts, which have been underway for many months and have received the strong endorsement of the School Committee, will greatly improve the ability of the School District to track and forecast trends and to flag worrisome trends with greater accuracy.

Commenting on the initiative, Johnson said, "The Business Office has been working diligently all year to better refine cost monitoring measures; including the introduction of a purchasing manual, consolidating fee collection practices, creating a formalized position control process and developing a new chart of accounts. We have much better financial monitoring tools in place for FY11." 

YourArlington has asked Johnson to respond to the claim made by a private citizen citing an anonymous source on a Web site that the $1.5 million occurred because of a "mistake," which auditors Powers & Sullivan discovered recently. (YourArlington is not linking to the Web site where this claim is made because the site has a policy aiming to prevent commercial use of its information.)

In a brief telephone interview Aug. 26, Johnson said she does not respond to anonymous claims made on unnamed Web sites.

"I invite him to discuss this face to face," she said, suggesting one option is during public participation at a School Committee meeting.

She did confirm that Stephen Harrington has filed a public-records request for school-budget information as of the Aug. 3 School Committee meeting. She said she stands by her response to Harrington, telling him Aug. 20 that she has 10 days to respond to his request. 

This story was first published Wednesday afternoon, Aug. 25, and then updated that night and the next day.