Mistrust and anger over financial mismanagement in the Manatee County school district has reached epic proportions with disturbing revelations over the past five days of the lack of accountability and transparency.
At Monday night's school board meeting, both members of the public and the board chastised administrators over severe budgeting errors. Board vice chair Karen Carpenter expressed a "deep sense of betrayal" in the wake of Friday's stunning disclosure that errors in the 2011-12 budget left a $3.5 million deficit in the district's reserve fund amid a lack of accounting for $8 million in expenditures. That news was a "big nasty surprise," she stated from the dais, elaborating that the situation constituted "gross negligence."
There are no better words to describe this violation of the public trust -- and state law governing how much districts must hold in reserve funds. District critics who have been sounding the alarm about questionable spending and budgeting errors now have indisputable evidence that the district's finances are not sound.
Furthermore, Carpenter expressed a complete lack of confidence in the district's finance department -- a position echoed by members of the community during public comments at the packed meeting.
This upheaval follows Tim McGonegal's sudden resignation as superintendent only a few hours before Monday's budget discussion, this just days after his announcement of his retirement in February. Board chair Harry Kinnan read McGonegal's email statement, which stated in part: "A leader takes responsibility of the results of their organization. The financial results for 11/12 are unacceptable."
That's certainly true, but the abruptness of his resignation put the board in a bind. By state law, the panel could not proceed without a superintendent. After much discussion, the board appointed Bob Gagnon, promoted to assistant superintendent just this past December, as the "temporary" interim superintendent.
This is a critical time for the school district as state law also requires the approval of a 2012-13 budget within days -- hardly enough time to vet a now suspect budget. Still, the board can amend the budget in the coming months.
Rebuilding public trust and confidence will likely take longer. The board will immediately pursue an independent audit in order to answer several key questions.
The deficit came about partly as a result of the 2011 hiring of 58 teachers for elementary schools. The $3.2 million for their pay and benefits did not get placed in the budget. Nor did $700,000 for textbooks or some $500,000 for E Virtual School salaries. Plus, teacher salaries and benefits exceeded budgeting by $6.7 million. How did all these errors occur? And who is responsible? How can anything like this be prevented from happening again?
The timeline on these developments is also suspect -- troubling, in fact. District administrators discovered the defict in early August, yet McGonegal waited a month to inform board members. Why keep such damaging information secret? The board continued to approve expenditures when that would have been unwise.
The political ramifications of withholding that information are readily apparent. Board member Bob Gause was running for re-election against school budget hawk and district administration critic Linda Schaich. He won that Aug. 14 race with 56.2 percent of the vote.
That victory now comes into question. Gause said he did not learn of the lack of accounting until last week.
But had voters known about the district's deficit, would enough have switched their ballots to Schaich, who has long decried spending priorities and financial errors? Is this why the deficit remained unknown publicly until last week? That is not an unreasonable conclusion.
McGonegal, absent from Monday's meeting, owes the community an explanation for both the accounting errors and the month-long delay in revealing the problem.
As the board proceeds quickly with an audit, the district must address the reserves issue. State statutues require a minimum of 3 percent, but McGonegal's corrective action only brought the balance up to 1.8 percent. The board must come up with a solution quickly and get state approval.
With November's school board runoff election between David "Watchdog" Miner and Robert Moates for Kinnan's seat also in the political mix, the board and district face tremendous pressure during a rough time of transition. Approving the 2012-13 budget, solving the reserves shortfall and arranging a financial audit all must come in short order. Plus, a course of action on filling the superintendent's position must be determined.
Gagnon and Michael Boyer, the district's chief financial officer who assumed the post in March, will carry the load on reinstituting accountability even ahead of a thorough audit. One of their first steps should be the re-establishment of the citizens budget review committee, which McGonegal dissolved last year over the objections of community members. This should help restore transparency.
The issue of teacher pay after two years of salary cuts remains the 800-pound gorilla in the room.
Moving forward, one positive takeway from Monday's meeting appears to be unity among board members to work together to solve these daunting challenges. Community input is paramount, too.