SOUTH KINGSTOWN –– A lawyer for the City of Cranston took jabs at the Cranston public schools’ fiscal management yesterday as a long-awaited trial over millions in local education aid kicked off in Superior Court here.

The district sued the city in May for $4.9 million, contending it was not given enough money to adequately run the schools for the fiscal year that ended June 30.

And when the City Council rejected a proposed settlement this month, it set the stage for a contentious courtroom battle.

The schools called the first and only witness of the day –– the district’s education consultant, Thomas E. Sweeney Jr. –– in the morning.

By mid-afternoon, city lawyer Matthew T. Oliverio had Sweeney on the defensive about the school district’s health care budget.

Sweeney also acknowledged concerns about the district’s transportation expenditures.

And he testified that officials failed to comply with a spending freeze ordered by Supt. M. Richard Scherza in November 2007.

Oliverio suggested that the school district, which was projecting a $3.5-million shortfall as early as last fall, did not move quickly enough to address its problems.

Oliverio’s question: When Sweeney came up with the $3.5-million figure, which would later expand to $4.9 million, did he believe the district faced a fiscal emergency?

Here, the schools consultant struck back.

“Anytime that you have a deficit, it’s a fiscal emergency –– especially a deficit of that size,” he said. “That doesn’t mean you can stop operating the schools.”

The sometimes tense exchanges between Oliverio and Sweeney marked a sharp contrast to the morning session.

At the start of the trial, schools lawyer Ronald F. Cascione asked Sweeney a series of questions designed to elicit testimony about a lean district serious about further cost containment.

The district hired Sweeney, a former superintendent of the West Warwick schools, and his business partner Walter Edge, a school finance expert, in April 2007.

Sweeney testified that the pair combed through the district’s finances and visited a series of schools in an effort to identify any spending not required by law, regulation or contract.

Commissioning the audit was not just an exercise in belt-tightening.

Whipping a schools budget into shape is a prerequisite for suing a municipality for more cash, in what is known as a Caruolo action.

Sweeney testified that the schools made an honest effort to trim costs in recent months.

He credited the district, for instance, with leaving some vacancies open and asking remaining employees to pick up the slack.

And he suggested that many of the district’s long-standing fiscal practices needed no fixing.

He praised school officials, among other things, for educating children with severe disabilities in-house, rather than paying hefty tuitions for out-of-district placements.

And in the end, Sweeney said, he determined that every program but two –– an enrichment program for gifted students and a Junior Reserve Officers Training Corps (ROTC) program run in conjunction with the Army at Cranston High School East — are mandated.

Sweeney suggested that cutting even the two nonessential programs in the 2007-08 fiscal year would have been difficult. The schools’ contract with the Army allows for a dissolution of the program only by mutual consent, or with a one-year notice from the district.

But Oliverio, in his cross-examination, suggested that the cash-strapped district should have pushed the Army to drop the training program.

And he harped on the limitations of Sweeney and Edge’s audit.

The review only determined that the bulk of school programs were required by law or regulation, he noted.

It did little to identify inefficiencies in those programs –– an unneeded administrator here, or extraneous secretary there.

The clear implication: there was fat to trim in the schools’ 2007-08 budget and the district is not entitled to more money from the city.

The city is expected to expand on that argument, with more questions for Sweeney, when the non-jury trial before Judge Judith C. Savage resumes tomorrow.

The city-schools legal showdown had been brewing for months.

School officials had long warned that the $125.3 million the City Council appropriated for the schools for the 2007-08 fiscal year would not be enough to pay the bills.

And the district’s lawsuit came as little surprise.

Lawyers for both sides spent two weeks hammering out a settlement in late June designed to provide the district with a cash infusion and curb schools’ spending in the long run.

But the City Council rejected the deal, with opponents arguing that the long-term checks on spending were not strong enough.

dscharfe@projo.com