Norwich — A bill proposed by Gov. Dannel P. Malloy dramatically would change the governing board and budget approval process at Norwich Free Academy, ending the academy’s financial independence and requiring disclosure of its private endowment revenues.

The bill would require all eight partner districts to appoint members to the NFA board of trustees and that the publicly funded portion of the academy's annual budget be reviewed by school boards in those towns prior to adoption by the NFA board. The NFA board also would have to hold a public hearing on its budget prior to adoption.

Officials from both the NFA board of trustees and the privately funded NFA Foundation Inc. said they are “thoroughly reviewing” the governor’s proposed bill and rigorously will defend NFA’s historic independence, which dates back to 1854, when the bill is reviewed by legislative committees.

“As framed, it appears the bill would have profound consequences for NFA,” NFA board of trustees Chairwoman Sarette Williams said in a written statement Friday, “which is the state’s only privately governed, independently endowed academy. Since 1854, NFA has delivered both educational excellence to the region’s students and economic value to all partner districts.”

The governor's plan, listed as proposed amendments in Bill No. 786, does not name NFA specifically, but includes several provisions that would apply to each “endowed high school or academy approved by the state Board of Education.”

The proposed bill would require endowed academies to include representation on their governing boards “selected by each local or regional board of education that sends more than 50 students to such incorporated or endowed high school or academy. Such representative may be the superintendent of schools employed by such board of education.”

Currently, the 12 members on the NFA board of trustees are elected by the NFA corporators to three-year terms, and can serve for up to four terms.

According to enrollment lists compiled by the state Department of Education, all eight local partner districts with a contract naming NFA as their designated high school send more than 50 students to the academy, led by Norwich at 1,538 students. The eight districts are: Bozrah, Canterbury, Franklin, Lisbon, Norwich, Preston, Sprague and Voluntown.

Another provision in the bill would require the academy's governing board to hold a public hearing on portions of its annual proposed budget covered by public funds and to submit those portions of the budget to boards of education in the sending towns for review.

The bill would not require the municipal boards of education to approve the academy budget, however.

In addition, the bill would require endowed high schools and academies to submit certified audit statements of all revenue from public and private sources, its governing board's expenses and the most recent IRS Form 990 filed by nonprofit entities.

The NFA Foundation reported assets totaling $70 million and total of $4.3 million in its 2014 IRS filing, the most recent year available.

The NFA board of trustees currently holds open meetings to discuss and vote on proposed annual budgets in February, but does not hold a public hearing on the budget and does not submit draft budgets to partner district boards of education.

Annual corporators’ meetings are open to the public, including nominations and votes on new board members and officers and a review of the academy's activities for the year. But the group goes into executive session to discuss the finances of the private NFA Foundation. Other than announcing the annual contributions the foundation makes to subsidize the budget and to fund specific capital projects, the foundation's activities are kept private.

Chris McClure, spokesman for the state Office of Policy and Management, said the governor’s bill is an effort to improve transparency for the towns paying tuition to the endowed high schools and academies on budget and governance matters. He said district officials have expressed concern in the past that they are not involved in planning and budget decisions at the academies, and local budget cuts hit the lower grades, causing disparities in the school system.

“As all of our communities and taxpayers strive to keep local budget costs down, this proposal provides a path forward to improve transparency and local representation in how public education dollars are spent,” McClure said.

Norwich Superintendent Abby Dolliver said the Norwich school board has not yet discussed the proposed bill and declined to comment extensively about it.

“I always felt we should have more conversation about the budget and the contract,” Dolliver said.

Norwich school board Chairman Aaron “Al” Daniels said the changes all sound good, but he questioned whether it would change the budgetary outcome. But he said he would welcome Norwich having a seat on the NFA board.

Preston Board of Education Chairwoman Jan Clancy said representation on the NFA board would improve communication with the partner districts. She said Preston’s main concern about the budget was the timing and receiving the tuition rates in time for the local budget process. She said NFA has improved that in recent years. When the towns signed contracts two years ago, NFA officials informed local school officials to expect tuition increases of 2.5 percent in each of the first three years of the contract.

“I think all the towns welcome any and all information we can get,” Clancy said. “(Representation) would help the flow of information to and from the feeding districts.”

She declined to comment on the bill’s effect on the NFA Foundation.

NFA Foundation President Keith Fontaine said the foundation and the support from donors are what make the academy unique. Donors, he said, “proudly support NFA as a privately governed, independently endowed academy.”

The NFA Foundation has provided a combined total of $5.9 million in subsidies to the NFA operating budget over the past five years. In addition, he said, the foundation has paid for technology upgrades, educational resources, athletic and fitness equipment and arts supplies and programs for all NFA students.

“The foundation joins with NFA in seeking a thorough review of the recently proposed bill, and especially in understanding how Bill 786 may affect the institution we support,” Fontaine said in a written statement.

c.bessette@theday.com