Manatee superintendent resigns; public concerned over lack of financial oversight

Public expresses concern over lack of financial oversight

kbergen@bradenton.comSeptember 11, 2012 

MANATEE -- Three days after district officials announced a $3.5 million deficit in the 2012-13 budget -- one that some officials have known about for the past month -- educators and members of the public packed into the Manatee County school board meeting Monday to learn that Superintendent Tim McGonegal has immediately resigned his post.

McGonegal, who had announced his intention to retire two days before the deficit announcement, didn't attend the meeting or hear the concerns expressed by angry residents about the mishandling of district funds.

Instead board Chair Harry Kinnan read a resignation statement from McGonegal who said he accepted responsibility for the financial disaster and was resigning effective Sept. 10.

The school board quickly planned to hold an emergency meeting with the district's audit committee to address the budget shortfall after approving McGonegal's resignation and naming Assistant Superintendent Bob Gagnon interim superintendent.

The board will decide how long Gagnon will serve in his new position by the next board meeting.

The meeting planned with the audit committee, which will be open to the public and could occur as soon as Wednesday, will help the board find an auditor who has not worked with the school district in the past who can determine how the deficit occurred and what needs to change to prevent it from happening again, Kinnan said.

Many at the meeting expressed concerns about who would be doing the auditing.

"The selection of the firm is essential," said Gagnon, who was adamant that an independent audit occur if he was to consider taking an interim superintendent position.

The demands for a forensic audit at Monday's meeting came after McGonegal announced Friday that he and the finance department had realized a $3.5 million deficit in the district's reserve fund.

The cause?

Fifty-eight teachers were hired for elementary schools in 2011, but their salaries, totaling $3.2 million, were never budgeted. Neither was $700,000 worth of textbooks. Or salaries for the E Virtual School totaling about a half-million.

In total, teacher salaries and benefits were $6.7 million over budget last year.

And though district administrators said they don't know how it happened, McGonegal said he'd known about the deficit since the beginning of August. Many in the audience were outraged that this information was withheld before the District 4 election between board member Robert Gause and Linda Schaich.

In the election, 56.3 percent of voters reelected Gause over Schaich on Aug. 14.

"(McGonegal) did not report it until after the election," Schaich said. "It needs to be investigated as to why this was withheld."

McGonegal has been superintendent since 2009 and his tenure has been defined by teacher salary cuts and furloughs, as well as poor performance grades for several district schools.

The district has cut 149 district level positions since the 2007-08 school year, as student enrollment has consistently increased since 2006.

"I'm very angry about what has happened," said Manatee Education Association President Pat Barber. "This is an incredibly disheartening day for education in Manatee County."

Barber said news of the deficit puts the fidelity of the 2012-13 budget in question.

District administrators discovered the major error in August, but did not tell school board members until last week. At that time, as required by law, the district also notified the state.

Florida statutes say that if a district's reserves fall below 2 percent, the state must approve an action plan within 14 days, or choose to assign a financial emergency board to intervene.

McGonegal's corrective action plan brings the fund balance up to $5.7 million, which is 1.8 percent of the budget. Board members, who postponed the budget hearing until Monday, weren't satisfied with that and said they'd use the extra week to brainstorm more ways to make up for the deficit, even if they wouldn't have the results of an audit before the state's deadline for passing the budget.

There is no mention of a time requirement to report that information to the state in the statutes.

In the end it was McGonegal who took the fall for the error, but some called for more heads to roll.

School board member Karen Carpenter said she had no confidence in the district's finance department.

"You have staff who have been here and who should have known," Carpenter said to chief financial officer Michael Boyer. "They should not be here doing any more damage."

Boyer took over as chief financial officer, a new position created to oversee the budget, this March after assistant superintendent of district services Jim Drake retired.

The budgeting mistake took place during Drake's tenure.

"I want to look forward," Boyer said. "We have to rebuilt trust. It's going to take time and facts and hard numbers."

Board members listened to the public's concerns, approving the final millage rate they passed in July.

The recess will give the board more time to make a plan to bring the reserves up to the 3 percent level mandated by the state. Florida statutes require the final millage rate and budget to be approved by next Monday.

The overall property tax rate passed by the board is now set at $7.589 per $,1000 of assessed property value, down 4.66 percent from last year's millage rate.

This means that a taxpayer with a home valued at $169,000 with a homestead exemption of $25,000 and no change in assessment will pay about $1,283 in school board taxes for the upcoming year.

That taxpayer is paying $53.42 less in school taxes than last year.

But any relief the public may have had in paying less in taxes this year, was overshadowed by disgust for the lack of transparency in the district.

Manatee County resident Sara Cohen came to her first board meeting Monday as a taxpayer and said she was outraged by the lack of accountability by the school board.

"I want to encourage you to be more accountable and more vigilant." Cohen said. "We're gonna be watching."

Many demanded that the district focus on improving student performance and increasing teacher pay, and criticized the board for not listening to suggestions that the district's finances were not secure.

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