Manatee schools superintendent calls for state investigation into past district leaders

Superintendent Mills sends letter to Inspector General, calls for investigation of past administration for 'malfeasance'

eearl@bradenton.comMarch 7, 2014 

MANATEE -- The superintendent of the Manatee County School District sent the state Inspector General a letter Thursday asking for an investigation into the district's past financial practices under former Superintendent Tim McGonegal.

Rick Mills, who replaced McGonegal, is calling for a state investigation of the past administration for "malfeasance" from 2010-12.

In his letter, Mills reiterates the district's overspending by $4.5 million from the 2011-12 school year and by $8.5 million in the 2012-13 school year.

The district overspent by a total of $38 million over the last five years, according to Mills' letter.

The Auditor General's report from the 2012-13 fiscal year ended June 30 had 33 findings in the operational audit and nine findings in the financial and federal audit. The findings amount to $10 million in questioned costs.

Mills took his post as superintendent in March 2013.

"It appears the reality regarding school district finances were kept from members of the Manatee County School Board and community or purposefully reported inaccurately," Mills wrote the Inspector General. "The list could go on, but suffice it to say that as Superintendent I am regularly asked by teachers, parents, school district employees and community members who will be held accountable for these catastrophic actions. That's why I am asking for an investigation by the Inspector General."

Reached at home Thursday night, McGonegal characterized Mills' letter as "hilarious."

"I want to do what's right, and that is not about giving ammunition to the school board members," said McGonegal, who took his retirement immediately in 2012 after telling the board of the district's deficit. "It's a distraction from their dysfunction.

"The Auditor General audit is done. It's over," he added. "They want to keep bringing it up to distract from their dysfunction."

Mills' letter continues:

"Although I was aware financial problems existed upon accepting the job, I was ultimately shocked by the sheer scope and magnitude of financial errors, neglect, incompetence, malfeasance and misfeasance uncovered in subsequent months as I built a new senior leadership team."

The letter goes on to say the Manatee County School District was the only district in the state that failed to post a balanced budget for two consecutive years, and failed to meet its state-required fund balance for five consecutive years.

Neither of those findings apparently raised red flags with the state or the school board at the time.

School board Chairwoman Julie Aranibar, who served on the board when McGonegal was superintendent, said she agrees with Mills' call for an investigation.

"I support what the superintendent is doing, and if there is an investigation, we will comply and provide any documents the state requires," Aranibar said.

Aranibar said it is difficult to look back at the finances between 2010-12 because of the way they were reported, and the lack of reporting. She said the board did approve past financial reports, but without a clear understanding there was a deficit.

"If the Inspector General verifies what was found in the Auditor General's report, that is the definition of malfeasance," Aranibar said. "Malfeasance is not doing your job as a public official. The question is, did the board authorize those expenses?"

Under McGonegal, Aranibar said, journal entries for the district's accounting were not kept up to date.

"When we asked for a report, we couldn't get it," Aranibar said. "Let's say I asked for a report on legal fees. In any given month, the money that had been reported under legal could be moved and reported under a different account."

In his letter to the state, Mills said there were "numerous instances" of past accounting and budgeting practices that come into question.

"The worker's compensation rates were inequitably changed to modify the impact to the general fund balance," he wrote.

Aranibar said the board had been approving financial reports based on this type of money shifting. She said it was done unknowingly, until the forensic audit report was released in February 2013.

"No one ever adhered to a budget, nor could we reproduce the budget, because there never was a line item budget," Aranibar said.

The forensic audit report stated there was no criminal activity within the district. There was no evidence any money had been moved to any personal accounts.

Florida state statutes does allow superintendents to move money from one account to another within certain funds, but it has to be replaced within 13 months.

Aranibar said in the Manatee County School District, money was shifted with no intention of ever being replaced.

Aranibar blames these occurrences and misuse of funds on antiquated district technology, which has yet to be updated.

"At the end of the day, more was spent than what came in," Aranibar said. "We should have upgraded our IT. That would have stopped it."

The Florida Department of Education Inspector General Mike Blackburn did not return messages left at his office or his home.

Former Manatee County School Board Chairman Harry Kinnan said: "Back in 2012 we did have a forensic audit the results of which are public record. As soon as things were discovered the people were terminated. Certainly, McGonegal was. If memory serves they hired teachers they didn't have money for in the budget."

McGonegal and assistant superintendent Jim Drake both retired in the midst of the revelations, but they were not terminated.

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


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

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