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Duluth schools CFO put on leave

The Duluth school district's chief financial officer was placed on paid administrative leave Monday.

Doug Hasler has been employed by the school district since fall 2016. On Tuesday, the district announced it would work with an outside financial firm to finalize its annual budget before the state's June 30 deadline.

Inconsistencies were discovered between the preliminary budget approved earlier in the spring and its final iteration, Superintendent Bill Gronseth said Tuesday.

"We want to be sure that what we are presenting is accurate and we are prepared for next year," he said, declining to comment on the reason for Hasler's leave.

Some board members expressed dismay at a recent meeting at having little information on the current budget situation. Hasler explained there were unique challenges to the process this year.

Gronseth said "considerable changes" were made to next year's budget, including the shifting of some funding streams — like the one based on school poverty levels meant to help underperforming students, which is also known as compensatory education funding. That was just one of several complex changes, he said.

The board voted in January to keep a majority of the compensatory money with the school that generates it. The school district had previously used up to half of those funds for different uses, such as lowering class sizes in all schools.

Member Nora Sandstad told the News Tribune on Tuesday she was "deeply disappointed" in not having a budget to approve at that night's upcoming meeting, which is traditionally when the board votes on final numbers.

"The board has been fairly clear and I have been clear in my expectation of the kind of budget we want to see," Sandstad said. "That it comes in balanced and clearly indicates what we are getting and what we are spending. I expected to have that (at the last business meeting) and was surprised not to get it."

The preliminary budget showed a deficit of $1.6 million and investments of $2.5 million, creating a $4.1 million shortfall. That's the same deficit reported as recently as May 9 by Gronseth during a press call with officials from the Minnesota Department of Education. The call was related to Gov. Mark Dayton's emergency funding proposal.

Sandstad said she took issue with the process — not the numbers. If a budget isn't approved by the end of the month, she said, the state won't send the district its allocated money and spending would halt.

The district hasn't yet hired a firm, but the board plans to vote on a bare-bones budget June 28, following a meeting early in the week. Work with an outside adviser would mean a vote on a more fleshed-out budget in July, Gronseth said, which the state should allow. Staffing decisions — including layoffs — were set in motion following the preliminary budget. Gronseth said retirements offset layoffs, but he didn't have those numbers available Tuesday night.

Hasler most recently worked for a school district in Elkhart, Ind., where he was executive director of support services. He is also an attorney and has worked for the Indiana Department of Education, according to his LinkedIn profile. He has degrees from the University of Notre Dame and Indiana University Bloomington. Attempts to reach Hasler on Tuesday were unsuccessful.

Former board member Harry Welty called Hasler "a breath of fresh air," citing his transparency and swiftness in providing requested public data.

Welty said working with Hasler "was the first time I had a budget person able to explain things to my satisfaction. ... He was far too competent not to be able to come up with a budget."

If Hasler's leave becomes permanent, he would be the third top administrator to depart this year in the school district of about 8,500 students. Assistant superintendent Amy Starzecki and curriculum director Mike Cary both accepted district leadership positions elsewhere in the region. Cary spent four years with the district and Starzecki was employed for three.