Claremont School Board Finance Committee — November 19, 2024

MEDIUM A stated special-education compliance problem, positions nobody can fill, and a contracted-services line running 46 per cent over budget

The high-school principal put it on the record at 0:26:03: "special ed wise. One of the big issues that we have is our compliance. I know that's an issue at the high school. I am Maginn [imagining], it's a district wide" — and again at 0:26:53, asking for a special-education secretary "to make sure that the paperwork gets done because we're getting blasted for looking back for years over compliance issues," framing the request as raising "our standing with the state with our compliance issues." No one at the table asked what the findings were, who made them, or what corrective action was owed, and no document in any share answers those questions.

Behind it is a staffing picture the same meeting laid out in detail. Student services carries an unfilled mental-health counselor post where the signed candidate withdrew after the background check (1:26:06), an unfilled elementary self-contained special-education teacher and case manager, and elementary counselor vacancies — "we've got a lot of open positions trying to fill, and nobody's applying." The middle school is carrying four unfilled teaching positions, one per subject area, on a schedule its principal calls unsustainable (0:27:42). Maple Avenue's school counselor was moved to the tech centre and not replaced (0:46:54); Bluff's counselor position is open (0:55:12); and one full-time social worker covers all three elementary schools (0:41:19), with the shortfall absorbed by principals, a student-service coordinator and the high school's social worker travelling between buildings. The money moves accordingly: contracted services "budgeted at 500,000 514,000 this year. But we're probably in the neighborhood of 750 for the year. Because I, we people aren't applying" (1:25:16) — roughly a 46 per cent overrun on that line, offset in the aggregate by the salaries not being paid. Extended school year, a service specifically "to prevent regression," is simultaneously coming off expiring ESSER money and into the operating budget (1:31:19).

IDEA requires that a free appropriate public education be available to every eligible child aged 3 through 21 residing in the State, and the obligation does not bend to a hiring market. Vacancies filled by contractors are a lawful response, not a violation, and the district is plainly buying the coverage rather than dropping it — that is what the $750,000 represents. The reason this is graded MEDIUM rather than HIGH is that the record establishes a stated compliance problem and a service model held together by contractors and workarounds, but does not establish any specific child's services being denied, and names no finding, corrective action plan or determination. Note also the interaction with flag 2: the same vacancy problem drives the ESL gap, but only there does a district officer say outright that a required service level is not being met.

What would move this to HIGH: the state's special-education monitoring findings for the district, or evidence of IEP services undelivered for want of staff. What would clear it: a closed corrective action plan and a filled-position report.

Sources: 34 CFR 300.101 — FAPE must be available to all children with disabilities aged 3 through 21 residing in the State; RSA 186-C:18 — state special education aid; RSA 189:28 — statistical reports to NHDOE; aid withheld until complete and accurate information is submitted.

MEDIUM Out-of-district placement: $2.3 million budgeted against $3.35 million stated, on a line that has more than doubled in two years — and the discrepancy is never reconciled

Inside ninety seconds at 0:20:05 the meeting produces three different numbers for the same thing. The board chair recalls "4 million, roughly," district-wide. The high-school principal narrows it to his building — "I think we were at two point. 3 million" — and counts "30 kids." The Director of Student Services then says: "The high school has a total of 30 students. And out of district placement, at the tune of 3.35 million." The principal responds by reading the budget line rather than the actual: "the tuition, private, is that was budgeted is 2.3 million. And then previously the before that the year before that was 1.5 and then 1.4." Nobody reconciles $2.3 million with $3.35 million, and the committee moves on. On the figures as spoken, one line has gone from $1.4 million to $3.35 million in two years — a 139 per cent rise — for roughly 30 students, or about $112,000 each, against a district that then has to absorb $75,319.18 per student before any state catastrophic aid attaches (see flag 5).

The second half of the concern is oversight of what that money buys. The chair, drawing on six years as a juvenile probation liaison, asked directly at 1:38:26 whether the district verifies "if they're getting what we think they're getting," relaying a former colleague's view that post-Covid placements had drifted toward containment. The answer was candid and limited: "Not as much as I would like to. But we have someone who focuses on that work. And like, today she went down to Kendall Firm to visit their program." Where a public agency places a child with a disability in a private school or facility, IDEA requires that the child be provided an education meeting the standards that apply to the State and local agencies, under an IEP, at no cost to the parents — a standard that presumes the placing agency knows what the facility delivers. A single staff member making site visits is not by itself a breach of anything; it is a thin evidentiary base for a $3.35 million line, and the committee accepted it without asking for a schedule of visits or a written monitoring record.

In fairness: the same officer rejected the containment characterisation from first-hand observation — "even the programs I visited have visited this year. They work hard at academics" — and offered the committee a joint site visit. And the driver is real rather than administrative: "a lot of the kids who are out of district need, some heavy therapeutic treatment. I can't hire mental health, so… can't bring that person back if I don't have the staff to work with them."

Sources: 34 CFR 300.146 — children placed in or referred to private schools by public agencies must receive an education meeting SEA/LEA standards, under an IEP, at no cost to parents; 34 CFR 300.101 — FAPE; RSA 186-C:18, III — state liability above 3½ times the state average expenditure per pupil.

MEDIUM Catastrophic special-education aid paid at 67.5 per cent — and the statutory rate stated to the committee as 90 per cent, which no version of the statute then in force contained

The shortfall itself is real, external and independently corroborated. Whitney: "the shortfall makes the state can cover only 67.5% of the funding" (1:09:03); Henry confirms it is what the district is receiving and adds "It goes lower 62." Four days before this meeting the New Hampshire Bulletin reported the same statewide figure — $33.9 million appropriated against $50.3 million of eligible reimbursement requests, a 67.5 per cent rate, against 87 per cent in 2023 and 98.3 per cent in 2022. Whitney's "87% last year" matches the Bulletin's 2023 figure, though the two records label the years differently. The committee's operating numbers are, in short, right.

The legal frame given to them is not. Henry told the committee (1:09:08): "they're supposed to fund up to 90%. Yeah. But they don't." RSA 186-C:18, III makes the department of education liable for 80 per cent of a student's special-education cost above 3½ times the state average expenditure per pupil, and 100 per cent above ten times it; the district carries the first 3½ times plus 20 per cent of the band between. No 90 per cent figure appears in that section, and none appeared in the 2023 or 2024 codifications either. The nearest thing to a 90 is prospective and moves the other way: HB 1563 of 2026 would reduce the top tier from 100 per cent to 90 per cent from 2028. The distinction matters because it changes what the state's default looks like: told the target is 90 per cent, a committee reads a 22.5-point gap; the statute's own ceiling is 80 per cent for the band most placements fall in. It is also not settled on this record whether the 67.5 figure is a rate applied to cost or a proration of an already-80-per-cent entitlement — it is reported as a share of eligible reimbursement requests, which points to the latter, and neither reading yields 90.

The second point is one the committee could not have known. At the time of this meeting there was no floor under proration. RSA 186-C:18, III(a) as codified in 2023 and 2024 said only that an insufficient appropriation "shall be prorated proportionally based on entitlement among the districts entitled to a grant" — full stop. A 67.5 per cent payout was therefore lawful. The 2025 budget trailer (HB 2, §137) added the sentence now in the statute: the department "shall distribute to the school district not less than 80 percent of the district's entitlement in the fiscal year." Had that floor been in force in FY2025, Claremont's entitlement would have been paid at 80 per cent rather than 67.5. A reviewer reading today's statute against this meeting would reach the wrong conclusion about the State's conduct in 2024, which is why the vintage is spelled out here.

McCosker's on-camera explainer at 1:10:20 gives three thresholds, of which two check out and one is unverified. Catastrophic aid: "we would have to spend $75,319.18" per student — consistent with 3½ times a state average per-pupil expenditure of about $21,520. Court-ordered placement: "the district has to pay $59,740, and then the courts pay everything beyond that" — RSA 186-C:19-b does cap district liability for placements for which DHHS has financial responsibility, at 3 times the state average, but three times the same base would be about $64,559, so the two figures do not sit in the 3½:3 ratio the two statutes prescribe and at least one is from a different vintage; "402 aid" is not a citation this page could verify and is recorded as spoken. Episode-of-treatment care "supposed to be 100% covered by DHHS. In reality, I don't know that it is" is a characterisation, not a finding.

Sources: RSA 186-C:18, III — 80% above 3½×, 100% above 10×, proration (current text, including the 80%-of-entitlement floor added in 2025); RSA 186-C:18 as codified 2024 — proration with no floor; RSA 186-C:19-b — district liability capped at 3× the state average for DHHS-responsible placements; 2025 N.H. HB 2, §137 — removes proration and requires disbursement of at least 80% of entitlement; N.H. HB 1563 (2026) — three-tier special education aid formula; New Hampshire Bulletin, 15 November 2024 — 67.5% reimbursement, $16.4M shortfall reporting, not law; New Hampshire Bulletin, 10 July 2026 — the new formula explained reporting, not law.

MEDIUM A $70,000 Medicaid recoupment the district could not document to the second auditor's satisfaction

At 1:14:36 the Director of Student Services disclosed a school-based Medicaid audit he had put on the chair's desk that day: "what we found out is the audit isn't really fair or objective." The sequence as he described it — the audit opened two years earlier; the first auditor told the district's Medicaid clerk what documentation he required and she assembled it; "That person disappeared. No, no, he quit or nobody knows"; "New auditor comes in, looks at everything and says, oh, no, that's not what I want. I want all of this. And you haven't provided it for me. So now we're going to bill you." The outcome: "we have to pay Medicaid back $70,000. Our Medicaid clerk, originally, the number was closer to 80. She was able to fight it and whittle it down to 70,000."

Two federal rules frame this. A Medicaid provider agreement obliges the provider to keep "any records necessary to disclose the extent of services the provider furnishes to beneficiaries" and, on request, to furnish the Medicaid agency any such information and any information regarding payments claimed — an obligation that runs to the service documentation itself, not to whichever list a particular auditor supplies. And the State's recovery is not discretionary: once an overpayment to a provider is discovered, the State must pursue it and must refund the federal share within one year of discovery whether or not it recovers. So the recoupment mechanism is doing what the law tells it to do; what the record shows on the district's side is that the underlying documentation could not be produced when the request changed. That is a control weakness in a revenue stream the district relies on, and it is being carried into the FY2026 budget conversation as a fact rather than as a corrective-action item.

In fairness, the district's account has support: the business administrator said "there's a lot of schools that are in this boat. It's not just us," and, asked by the chair whether this is statewide, answered "Statewide" — and school-based Medicaid claiming rules in New Hampshire have in fact been in flux. And the clerk's negotiation reduced the exposure by roughly $10,000. The item is graded MEDIUM rather than HIGH because nothing in the record establishes an improper claim, a fraud referral or a sanction — only a documentation failure and a repayment. It is worth carrying forward for one further reason: HB 1563 of 2026 would require districts to exhaust Medicaid to Schools revenue before claiming state special-education aid, which makes the quality of this documentation a condition of future aid rather than merely a revenue matter.

Sources: 42 CFR 431.107(b) — provider must keep records disclosing the extent of services and furnish them on request; 42 CFR 433.312 — State must recover overpayments and refund the federal share within one year of discovery; N.H. HB 1563 (2026) — districts to exhaust alternative funding including Medicaid to Schools.