Manatee County school district finding its way to fixing financial failures

December 6, 2012 

The Manatee County school district appears on track to finally resolve critical budget deficiencies only discovered after a financial catastrophe became public. On Tuesday, interim Superintendent David Gayler and Chief Financial Officer Michael Boyer disclosed additional startling lapses in the district's control of expenses over the past two years.

At that workshop, school board members also heard $7 million in unbudgeted items have been discovered in the 2012-2013 budget with more likely to be found. This follows earlier revelations about $11.3 million in unbudgeted expenditures in the 2011-2012 budget.

For the past several years, school district critics have complained loudly that budget figures were inaccurate and incomplete. Several culprits have cropped up: poor accounting practices, lax district management and faulty technology.

This year, the budget failed to account for international baccalaureate program at three schools, overtime pay and band uniforms. In the previous year, salaries and benefits for some teachers and maintenance staff did not appear in the budget, which added up to the majority of the deficit.

These operating budgets appear patterned after Swiss cheese, with hole after hole being filled later by borrowing from the district's reserve account. The question here is why would a large organization -- this one with more than 5,000 employees -- implement a budgeting process that did not account for all projected expenditures?

We'd like to hear the answer to that from former Superintendent Tim McGonegal, who resigned abruptly in September after the initial disclosure of a budget deficit. We'd also like to know how could the district perform an accurate count of full-time equivalent students -- the basis for state funding -- without someone in charge. Why wasn't a coordinator assigned to this task to ensure proper revenue?

Gayler found 17,000 errors between August and October, which could have cost the district $5 million in revenue. That would have been a devastating loss during this crisis.

These human failures were compounded greatly by a technological one.

In decades past, computer software linked spending in various departments to the proper funds in the budget and monitored teacher hires, departures and transfers -- providing accounting safeguards that prevented overspending. That system was unplugged in 2009 and the replacement software failed to measure up.

Boyer blamed this accounting system failure for the district's financial nightmare, telling board members: "I firmly believe that this was the contributing cause to the deficit. I think we have been severely hemorrhaging since 2009. But we had a fund balance to cover it."

But that money's no longer available, and spending cuts loom.

The primary casualties this year are teachers and maintenance staff, projected to receive $2.5 million in raises that now appear to be off the board since the money was not budgeted. The district found another $1.7 million in cost controls, leaving a balance of $2.8 million to cut this year.

This is all a shameful situation where students and staff will pay for management failures.

Still, looking forward the public should be encouraged by the fact the district has found the primary reasons behind the financial mess and is working diligently to right the course.

Plus, Gayler intends to build a line-item budget from scratch for the 2013-2014 school year. This, too, should serve the public well -- with complete transparency paramount as the district continues working to rebuild trust.

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