MANATEE -- A preliminary look by auditors at the monetary problems of the Manatee school district shows $11.3 million of unbudgeted expenditures last year.
That should have translated into a $5.3 million budget deficit, not the $3.5 million originally reported that led to the resignation of district Superintendent Tim McGonegal.
But surpluses held the budget gap down, external auditors told the district's audit committee Wednesday.
Where those surpluses came from, accountants aren't exactly sure.
Auditors Mauldin & Jenkins associates Leanne Cross and Tommye Barie presented several other findings in a special audit committee meeting Wednesday, revealing that not only were more expenses not accounted for last year, but the district may have flaws in its workers compensation rates and vacation payout system through the Deferred Retirement Option Program.
Expenses not budgeted for, according to the auditors, include:
n Almost $6.3 million for the salaries and benefits of some teachers and maintenance workers who had been funded by stimulus funds, which ended in June.
n $2.9 million for the salaries and benefits for 58 teachers hired in October 2011.
n Almost $2.2 million for salaries and benefits restored when the school board decided early this year not to make a 1.75 percent pay cut retroactive.
Since there was $6 million in emergency funds, the district should have had a $5.3 million deficit but somehow ended up with a deficit of $3.5 million.
And it's still not clear what happened to the $700,000 in textbooks and almost $500,000 in Virtual School teacher salaries that McGonegal reported as unbudgeted a month ago.
"We have a lot of unanswered questions right now. We don't know whose an
swers are correct," said committee and board member Karen Carpenter.
Carpenter said perhaps budgeting mistakes could have been found earlier if external auditors started checking district numbers on a quarterly basis.
This year's external audit didn't begin until mid-September.
Another finding from the meeting had to do with vacation payouts.
"Florida statutes limit the payout for accrued vacation to 60 days on termination or retirement," Cross said. "There are amounts being paid in excess of 60 days."
The problem stems when people enter DROP, which allows participants to begin collecting pensions during the last five years of their employment. During this time, benefits accrue interest in a trust fund until the five-year period is over.
Participants also can include accrued vacation money in their retirement benefit calculation when they begin the program.
But some get paid out again when they leave the program or they get paid for more than 60 days under the program.
Cross could not say how many people this finding included, but said the problem has been occurring for years and that most likely the money is not recoverable. It does not appear that former superintendent McGonegal is one of these employees. McGonegal was eligible for 39 paid vacation days, and a payout of about $3,500, when he left the district earlier this month.
"What we need to clarify is at what point were they paid and how much?" said audit committee Chairman Jim Toomey.
The district also may not be complying with federal mandates on workers' compensation rates.
The district is required to provide a uniform workers' compensation rate, regardless of whether positions are federally funded or not federally funded, Cross said.
"Obviously you contribute more for a position that is at a higher-risk versus positions those are at a lower risk, but they need to be uniformly charged across all the different funds," Cross said.
Barrie said the team is trying to verify the source of the rates used and whether they have been equally applied to everyone.
But finding documentation as to the source of funds and the rates that have been used has been difficult, Cross said.
No one seems to know who has that information.
Has the district just been doing it wrong?
"Probably," acknowledged Ed Daugherty, internal auditor for the Manatee school district.
But Daugherty said he's not sure what the external auditors were saying the district needed to change.
"I hate to say outright that our district is doing something wrong, but that seems to be what they are saying," he said. "I believe what we've been doing is based on the job title."
The external auditors made it clear at Wednesday's meeting that they would hold the results of their audit until the forensic investigation, to be conducted by a team from the Tampa-based agency Navigant, is completed.
"One of the most telling things is that the external auditors don't want to finish their report until the forensic audit is done," Carpenter said. "That means to me that they are really unsure of what they are dealing with."
Katy Bergen, Herald education reporter, can be reached at 941-745-7081.