MANATEE -- School officials have discovered a $3.4 million deficit in the 2012-13 school budget, Superintendent Tim McGonegal said Friday.
The deficit, undetected by administrators until early August, indicates a loss of more than $8 million in the district's fund balance since June 2012, when there was about $5.3 million in the district's reserve. The fund balance is the district's source of emergency revenue.
In the spring of 2011, the district hired 58 additional teachers to elementary schools but their salaries, totaling $3.2 million, were never included in the budget.
District officials seem unsure who to blame.
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"There was a disconnect," McGonegal said. "I can't explain why."
Chief Financial Officer Michael Boyer said that adding teachers to schools was motivated by a desire to accommodate the class cize amendment, which determines student/teacher ratios according to class level.
"I think there was a conscious effort to minimize the penalty for class size without understanding the effect on total cost," Boyer said. "But that shouldn't have happened."
In total, teachers' salaries and benefits were $6.7 million over budget in 2011-12. Also not budgeted was $700,000 for textbook expenses as well as $480,000 for teachers for the E Tech Virtual School.
Salary adjustments made after union negotiations also contributed to the $8 million deficit, Boyer said.
McGonegal made it clear Friday that his decision to retire was made well before the deficit discovery. McGonegal announced Wednesday he would retire from his su
perintendent position in February, citing a recent inability to handle the stress of the job and a 14-month long spree of migraines as part of his motivation for leaving.
"I made the decision to retire well before this," McGonegal said. "I wasn't going to announce my retirement until I had solutions to this problem."
The deficit became clear in early August, McGonegal said. Numbers weren't working out.
The number of transactions made after the fiscal year, unreliable methods to calculate salaries and benefits and the non-retroactivity of the recent salary decrease were cited as reasons that the district did not notice the deficit earlier.
This year, McGonegal said, the district waited too long to calculate salaries. But he was hesitant to point the finger of blame at anyone.
"This result is unacceptable," McGonegal said. "We need to build that fund balance back up."
A corrective action plan has been created that would bring the fund balance up to $5.7 million by June 2013. The plan relies heavily on keeping both current and additional district positions vacant, limiting staff travel and filling non-instructional school positions with substitutes.
It also puts a hiring freeze on 14 vacant district-level positions, including a print shop manager position in business services, assistant director of professional development and office services specialist.
The decision to eliminate 30 positions based on staff adjustments made during this year's five-day enrollment count also will help, saving the district $900,000, McGonegal said. The district ruled out salary reductions, layoffs and student-programming cuts as ways to solve the issue.
The district's corrective action plan needs to be approved by the Florida Department of Education, but as of Friday morning, McGonegal had not heard back from Deputy Commissioner Linda Champion. Districts must notify the state if they cannot keep at least 3 percent in their reserve.
School board members were notified about the mistake in the past few days, McGonegal said.
Board member Robert Gause said he found out about the deficit late Wednesday during his regular meetings with McGonegal. He described his reaction as "frustrated" but did not want to elaborate.
It remains unclear whether there will be consequences for those involved with the mistake.
"We have options," Gause said. "I'm sure that those options will be discussed on Monday."
Board member Julie Aranibar learned of the deficit Friday.
"There are a lot of implications to the timing of this," said Aranibar, who said she had not yet been sent a memorandum outlining the mistake. "I don't know the truth. All I know is that I found out today. And the public found out today."
McGonegal said his decision to retire was a culmination of stress in the past 14 months that he has not been able to effectively deal with, and he resisted the idea that a divided board or the prospect of working with a new member motivated his decision.
"It has nothing to do with the board. It has nothing to do with the teachers' union," McGonegal said.
Dave Miner and Robert Moates, candidates for the school board seat being vacated by Harry Kinnan, have been invited to a meeting Sept. 18 in which the board plans to decide how to pick the next superintendent. Miner protested the plans Friday, saying the process should be decided after the Nov. 6 election with the new board in place.
McGonegal confirmed that he has experienced migraine headaches, but said he has had them for the past 14 months, not several weeks as previously reported. He would not elaborate further on his health issues.
He said his family wanted him to take a break and look after his health.
"My family has been suggesting I retire, my wife especially," McGonegal said.
McGonegal's plan to leave before district business picks up in February was intentional.
"I intentionally picked Feb. 28," McGonegal said. "Whoever is here, it needs to be his or her decisions, not Tim McGonegal's."
He said he has no plans as of now to work elsewhere after his retirement, but might look into volunteering at schools in the future.
The new total budget for the 2012-13 school year, set to be released soon, will be $555,684,223, up almost $1.2 million from the $554,404,285 figure listed in the tentative budget for the district approved in July, Boyer said. The amended school budget was released Friday.
The change comes just in time for the final budget hearing for the 2012-13 school year at 5:45 p.m. Monday at the district's administration building.
"This is unfortunate on so many levels," said Aranibar. "It's unfortunate for the superintendent who works very hard, it's unfortunate for the teachers who don't have a contract yet and it's unfortunate for the community, because this is not a good way to build trust."
Katie Bergen, Herald education reporter, can be reached at 941-745-7081.