Law firm needed to hire auditor for Manatee school district budget, committee decides

kbergen@bradenton.comSeptember 13, 2012 

MANATEE - Members of the school district’s audit committee made it clear Thursday that the public’s perception of the district’s commitment to rebuilding trust was on their minds when they voted to hire an outside law firm to oversee a search for the agency that will complete a forensic audit.

Committee members will begin to compile a list of law firms, without ties to the district, that can ensure that the district stays independent of a search for an auditor who can explain a $3.5 million deficit in the 2012-12 budget.

The committee will reconvene on Monday morning to decide on a firm, as well as that firm’s role in the audit itself. On Monday night, the school board will have to decide whether or not to approve the committee’s recommendation to the board.

Interim Superintendent Bob Gagnon opted out of the whole process at the beginning of the meeting, saying that his involvement was inappropriate because this is an issue of public confidence.

School board attorney John Bowen also made it clear that he would be uninvolved, though he didn’t approve of the committee’s desire for special counsel.

“I do not see my role in the audit at all,” Bowen said. “Nor do I see the necessity of hiring a law firm to do a job that I wouldn’t do in the first place.”

Former superintendent Tim McGonegal, who resigned from his postion on Monday, informed school board members of the deficit last week, though he had known about it since Aug. 2. The deficit was caused when the district forgot to budget $8 millon of expenses, including the salaries of 58 elementary school teachers.

Costs and a timeline for action will have to be determined. Committee members were hesitant to give a cost for hiring a law firm to oversee the process, as well as the costs of the forensic audit.

“Until we know what the process entails, we don’t know what it will cost,” committee member Jim Toomey said.

Local CPA and current member of the probable cause committee of the Florida State Board of Accountancy Byron Shinn speculated that because forensic audits are done in stages, an initial audit that shows how the deficit happened and who knew about it, would cost around $25,000 to $50,000.

But, depending on what that audit showed, the district might need to do more work to answer further questions, Shinn said. Deciding to expand the audit to the capital fund or choosing to audit an additional fiscal year, as some suggested at the meeting, would all add to the final cost.

One thing that is certain is where that money will have to come from.

“It will be general fund money,” said district Internal Auditor Ed Daugherty. “It will be up to the board for how they fund it.”

Board chair Harry Kinnan said the board can control the price by limiting the scope of how involved the law firm is in the process and keeping a “laser focus” on what the charges are. Still, he said, that money will have to come from the general fund, most likely from the reserves that the board is currently trying to build up to $9 million.

Daughtery said he wouldn’t think the negotiations would take more than a few weeks, and that the auditor should be on the job within the month. Less than 30 members of the public attended the meeting.

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