The chairwoman of West Warwick’s School Committee said Wednesday the finance directors of the town and the School Department will meet Thursday afternoon to try to decide what — if anything — can be done to find the funds to pay teachers for work they have already completed, and for vendors seeking their money.

The problem: the department has run out of money.

The meeting will come just hours before voters gather at the high school to reconvene the annual Financial Town Meeting. Five weeks ago, residents overwhelmingly rejected a $79-million budget for the next fiscal year, which begins Wednesday.

“We’re working on it,” said Chairwoman Lindagay Palazzo, referring to the fiscal crisis that had led the department to tell the teachers that it cannot afford to issue two of the five biweekly paychecks it is supposed to pay out over the summer months.

Palazzo said she had no details about which vendors would not be paid or where money might be found.

Calls to the School Department’s finance director, Michael Petrarca, were not returned.

Supt. Kenneth Sheehan was taking a personal day Wednesday and not available for comment.

Palazzo said the department ran out of funds because the School Committee had expected to, by now, win its so-called Caruolo lawsuit, forcing the town to pay $3 million more for the 2008-2009 school year.

But that case is still being heard.

And what was the committee’s plan if the Caruolo request has been denied?

“Regardless, whether we win or lose, the town is responsible for our bills,” Palazzo said. “They’re going to have to pay them anyway.”

But Town Manager James Thomas says the School Department has already received the full $49.2 million to which it’s entitled this year, and it is not getting any more.

“I have been telling them since 2008 that it was going to be a problem and no one would listen to me,” he said.

Thursday night, at the Financial Town Meeting, if the proposed 2009-2010 budget is defeated again, the current budget will apply to the next fiscal year.

Palazzo said Wednesday that the School Committee is now prepared to live within either budget, in part because the teachers union has agreed to no pay increase.

On the municipal side, town officials have warned that failure to approve the proposed budget would result in layoffs for eight employees in the Police Department, eight in the Fire Department and nine in Public Works, for a total of 10 percent of the municipal workforce.

If approved, the budget would hike property taxes by 80 cents per $1,000 of assessed valuation.

gemery@projo.com