The school administrator who prepared a two-page report for Town Meeting about an audit completed last March says she had no intention of misleading the public.

Sue Mazzarella, the school's chief financial officer, says two paragraphs that were included in the full report but left out of the one presented to Town Meeting were only a prelude to more full and complete information and she said she omitted them to consolidate information.

Mazzarella responded to questions from YourArlington June 12 after Selectmen Diane Mahon brought the issue to Town Meeting's attention four days earlier.

Asked why two paragraphs at the top of the report about an audit by Powers & Sullivan were deleted, Mazzarella wrote:

"No, my intent was not to mislead the public. This is a ridiculous accusation by some Town Meeting members given that the full report was already sent out to the Selectmen and School Committee.

"I viewed the 'omitted' paragraphs as prelude to the real context and was just merely trying to consolidate information. In my opinion, the summary (which was included [in the report Town Meeting received]) is the most important piece because it outlines the concern and suggests recommendations for improvement."

In a separate e-mail, she described the report about an audit requested by selectmen that was contained in the annual fiscal 2009-2010 school budget report:

"The document you are referring to in the Town Meeting report was meant to be viewed as an excerpt from the Powers & Sullivan report. My intent was to highlight that all of our revolving/special revenue funds were in sound financial order!

"I certainly did not intend for this to be viewed as the official audit report (Selectmen & School Committee were already in possession of the full report).

"It's unfortunate that a perfect review with NO findings is overshadowed by comments made at Town Meeting.

"My office manages a budget of approx $45 [million] inclusive of $4.6 [million] in revenue and $2.6 [million] in grants. I was extremely pleased with the review letter and praise my staff for their efficient bookkeeping, GL [general ledger] management and attention to detail. As you know, many other school districts are not as fortunate as Arlington to have such clean reports."

Mahon raised the issue at Town Meeting June 8 during discussion of the fiscal 2010 school budget, saying the full report had been altered to avoid reporting that Powers & Sullivan had turned up "deficiencies" in the way expenditures were reclassified in certain accounts.

Interim Superintendent Kathleen Bodie told the meeting that there was nothing in the report that should be of concern to anyone.

One of the paragraphs not in the school budget report says:

"Although this is not an indication that special revenue funds were in any way misused, it does reduce the oversight of the expenditures by the Comptroller's office, as the reclassifications are entered into the general ledger directly by the School Department without providing supporting documentation to the Comptroller's office. This is considered a deficiency in internal control."

On June 15, Town Comptroller Ruth Lewis was asked to provide an explanation about why this is considered a deficiency, what steps are being take to improve the situation and who is taking those steps. An e-mail autoreply said: "I will be out of the office from Monday June 15 - Wednesday June 17."

Lewis's response was reported June 18, and it is contained in this story >>

As Town Meeting continued to discuss budgets Wednesday, June 10, Mahon rose again to address the Powers & Sullivan audit report, focusing on what she called an altered report. Bodie defended what had occurred, saying it was an issue of "cutting and pasting."

In response to Mahon's comments, Moderator John Leone asked that the full report be posted on the town's Web site as soon as possible. Members of the meeting applauded Mahon's comments, June 10.

The School Committee is expected to discuss the audit report at its next regular meeting, June 23.

After dealing with amendments, Town Meeting approved the fiscal 2010 budget of $38.4 million along with many other town spending plans in a unanimous voice vote. Lyman Judd Jr. (Precinct 9) delivered a loud "no."

This story was first published June 13 and updated after that.