Nutley school district faces $11M deficit, leading to teacher layoffs

NUTLEY, N.J. (PIX11) -- The Nutley Board of Education explains its dire financial situation, which has forced teacher layoffs for the 2024-2025 school year.

The district is facing a $7 million shortfall for the remainder of the current school year and was forced to eliminate more than a dozen positions to balance next year’s budget. The cuts include eight subject coordinators, a high school mental health counselor and a beloved history teacher and coach.

The most recent audit, released in February for the 2022-2023 school year, shows the Nutley School District spent $11 million more than it took in. The maintenance reserve budget was drained to an alarming $40, and the capital reserve budget dipped from $1.6 million to $21,000.

The problems were made public in March, and business administrator David DiPisa was placed on administrative leave.

For months, Nutley parents have been pointing the finger at Board of Education members, questioning why financial red flags weren’t spotted sooner.

“They trust the Business Administrators too much in many districts, and they have a lot of power,” said Nutley parent advocate Donna Ferraro. “And I think that’s just what happened. That maybe they weren’t watching enough.”

Nutley Board of Education attorney Scott Eveland said board members first suspected something was amiss last spring.

“It was the auditors who had identified some questionable things,” said Eveland. “That’s when they [the board members] started asking questions.”

Board of Education Finance Chair Joe Battaglia said an employee within the business office was out on paid leave, creating a backlog in daily bill processing. This, in turn, delayed monthly reports to the board, leaving trustees without a clear picture of the district’s finances.

Eveland said some of the information members received was wrong but that they had no way of knowing.

“If they’re not aware that there is a problem, then they don’t know where to look,” said Eveland. “They can’t sit there and look over somebody’s shoulder and see what they’re doing every day.”

Battaglia said the business office overestimated revenue expectations and underestimated or failed to budget for certain expenses. Further, Eveland said spotting the problems in real-time would’ve been nearly impossible.

“Having dealt with budgets before of this magnitude, it’s very easy for things not to be seen or hidden in line items,” said Eveland.

A state monitor, Jeanette Makus, is now in place to oversee Nutley’s finances. Makus, commenting during a Board of Education meeting, agreed that the Board received inaccurate information from the business office.

“What I can surmise is that the business administrator withdrew the money from maintenance reserve and then transferred it out and used it for other areas,” said Makus. “As a result, the budget was over expended, but it didn’t show - the board members wouldn’t have known - because the monies had been taken out of the reserve.”

Many parents have questioned why DiPisa was hired in the first place. He previously served as the business administrator in Lyndhurst from 2011-2017, leaving amid a state audit into budget deficits. That audit revealed that fund balances decreased starting in 2013, which was attributed to overspending and under-budgeting.

One parent, commenting during a recent Board of Education meeting, remarked, “To say that no one in public education knew of his reputation would be a lie.”

Parents also question whether some vendor contracts are a conflict of interest. According to board documents, the district paid more than $750,000 to Spruce Industries, a custodial supply company that employs DiPisa’s son-in-law as an account executive. The company entered a contract with the district in September 2020, just two months after DiPisa was hired.

Neither the Board of Education nor the district could comment on DiPisa or the contracts, citing personnel matters and an ongoing investigation. PIX11 News contacted David DiPisa for comment but did not hear back. The district is now awaiting a forensic audit by the Department of Education.

“It gets an independent party in here to really dive deeply into what happened, how it happened, and how it can be prevented,” said Eveland.

PIX11 News contacted forensic accountant Dr. David Glodstein of SUNY Westbury and asked him to review some of the district’s publicly available financial documents.

“There appears to be large fluctuations between budget and actual amounts,” said Glodstein. “The fluctuations to me indicate a possible problem.”

Glodstein is not involved with Nutley’s audit but shares some of the parents’ questions.

Many answers will likely not be available until the Department of Education completes its investigation. In the meantime, parents hope their children - and their education - are not collateral damage.

“We live in this town, we pay a lot of taxes and we have a great school system here,” said parent Lauren O’Reilly. “And we want that to continue, where our children are not suffering because of the mistakes of some people. And I think we just want to get answers, is the bottom line.”