Manatee School Board works on $8.6M deficit control

eearl@bradenton.comFebruary 11, 2014 

The Manatee County School Board: Linda Carpenter, left, Bob Gause, Julie Aranibar, Dave "Watchdog" Miner and Barbara Harvey. Manatee County School District photo.

MANATEE -- Amid a year of financial reconstruction, the Manatee County School Board held a special meeting Monday to discuss its Comprehensive Annual Financial Report.

The CAFR, which can be found online at manateeschools.net, details district budget issues and a revised plan to clean up those problems.

Superintendent of schools Rick Mills was not at the meeting Monday, so he could attend the Legislative Audit Committee session in Tallahassee, but his message in the financial report continues to put the blame squarely on past administrators.

"Due to a complete loss of fiscal controls dating back to 2009, a culture of rampant, unchecked spending at all levels and years of mismanagement and poor decision-making at the district level -- the Manatee County School District accumulated an approximate $38 million shortfall over a four-year period, failed to meet the state-required fund balance for the last three consecutive years and accumulated a significant budget deficit during school year 2012-13," Mills wrote in a letter to the school board and citizens of Manatee County.

Auditors found the school district deficit topped $8.6 million at the end of the last fiscal year.

"The unassigned fund balance for the general fund was a negative $8,634,431, or a negative 2.6 percent of total general fund expenditures," auditors reported.

District officials have said they aim to have an $8-million general fund surplus at the close of the fiscal year in June.

Don Hall, deputy superintendent of operations, said the annual financial report is a collection of existing data with no bearing on district fund balances. Hall said

the document belongs to the state auditor general.

"There has been a significant amount of confusion among the board, and staff wants to have a meeting to explain what the purpose of the CAFR is and the benefit of it," school board member Bob Gause said Friday. "It is primarily the audit, which has the same findings they went through in December."

Hall described the CAFR as a checklist of financial data that helps with bond-rating decisions.

"It determines the district's level of financial risk," Hall said.

The CAFR is not a required document, but Hall said if a district chooses to complete one, it must follow a checklist mandated by the American Society of Business Officers.

"If we don't submit a CAFR, possibly nothing happens to the district's interest rates," Hall said. "But they will not have the same degree of confidence in the district. Not doing the CAFR could raise interest rates and cause bonds to go down."

Wayne Blanton, executive director of the Florida School Board Association, said school district advisory councils were formed to put together district annual financial reports 16 years ago to encourage participation in oversight of schools.

"School finances are complicated," Blanton said.

Blanton said school finances are comprised of restricted state federal funds reserved for specific purposes.

State funds given for the number of students in a school district are partially unrestricted. Of the $6,800 allocation per student, the state is proposing $3,300 as unrestricted base student dollars, Blanton said.

As the economy improved, the district brought in an additional $5 million, according to the financial report. It also decreased expenditures by $15 million.

School board vice chairman Dave "Watchdog" Miner said he found the report surprising.

"When I reviewed this, I didn't understand what was there and why it was done in a particular way," Miner said. "It is important for the community to understand. We work for the community.

Michael Boyer, district chief financial officer, said the financial report represents "carryover problems."

"Over the past four years, if you look at the original versus the final budgets, there is a difference of $39 million," Boyer said. "This budget hemorrhaging has been going on for years."

Boyer said the largest budget variance has been personnel. Boyer said attrition, a decrease in the number of staff due to relocations or retirement, has not been figured into the 2013-14 fiscal year budget.

Last year the district projected teacher attrition to correspond with a sharp decrease in enrollment, which didn't happen. The district is bracing for another enrollment surge this year.

"Past budgets were silos, and nothing was connected," Boyer said. "Things weren't being checked against the budget, and we had a mentality of figuring it out later."

The draft of the comprehensive annual financial report will be reviewed by the district Audit Committee before going to the school board for approval.

"There is a policy we are supposed to follow," Gause said. "If we didn't do any of that, then we had to explain why we were deviating."

The school board is holding a workshop at 3 p.m. Tuesday.

Erica Earl, education reporter, can be reached at 941-745-7081.

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