Finally, Manatee County school district budget probe results coming

January 13, 2013 

Monday marks a momentous day for the Manatee County school board and district as well as the entire community. The forensic audit of the 2011-2012 budget will be released at an afternoon board workshop as investigators reveal key findings into how the district failed to account for $11.3 million in spending.

Everyone will get the report at the same time after an early release was rejected in a board vote Thursday.

The squabble over the timing of the report's release is now irrelevant, though we agree that the forensic investigators should be present to at least explain the primary findings in the 200-page report. Hopefully that will limit misinterpretations. The board and the public will have a brief understanding of the audit before delving into the report.

We fully expect the team of Tampa-based auditors from the consulting firm Navigant to return to Bradenton in the future to answer questions after the board and public have had time to digest the lengthy report. The cost is inconsequential in comparison with the gravity of this situation.

Finally, we'll have details about how school district administrators committed such egregious financial mismanagement.

The terrible accounting practices are not limited to the 2011-2012 budget. In early December, interim Superintendent David Gayler and Chief Financial Officer Michael Boyer disclosed major blunders in the 2012-2013 budget -- amounting to $7 million in unbudgeted items.

Part of the financial disaster came from not budgeting for some items and funding those later with reserve money, a poor practice that backfired when reserves could not cover the expenses. An unintended consequence of this accounting lapse is that any member of the community reviewing district spending from public documents could misinterpret the budget.

The overall district auditing practices need to be reexamined. At last week's board workshop, Chief Internal Auditor Ed Daugherty revealed the district's internal auditors do not review the budget because outside entities examine financial statements -- but only once a year.

That's been the practice for several decades, and helps explain why any budget crisis or suspected spending could remain hidden. District officials actually uncovered the current debacle in August, about the time external auditors would have been examining the books.

This begs the question: Why don't district auditors monitor financial statements regularly to ensure proper accounting?

Former Superintendent Tim McGonegal consented to an interview by the team investigating the budget, and his explanations should be illuminating.

The forensic audit began a month after his September resignation -- that coming only days after he disclosed the district had incurred a $3.5 million deficit caused by some $8 million in overspending. The external auditors found more and the figure jumped to $11 million.

The district has been under siege for years over the budget -- even to the point where criminal activity was suspected by a public very distrusting of administrators. On Monday at 2 p.m., we'll start getting some answers to all the questions swirling around the district.

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