Headaches continue more than a year after launch of Manatee schools’ costly software

More than 18 months have passed since the School District of Manatee County launched its now-infamous software system, a botched process that still poses critical concerns.

Ever since the program went live on July 1, 2018, Manatee has struggled to perform a fundamental accounting practice known as reconciliation. The process usually involves a comparison of internal financial records with outside bank statements to ensure they match, a safeguard that helps to catch mistakes and fraud.

The Audit Committee, a volunteer oversight group, will deliver a report to the school board during a workshop on Tuesday.

“The Audit Committee is extremely concerned and stresses that the district must make it a priority to take steps to correct the deficiencies in the PeopleSoft system,” the committee said in its report.

Reconciliations were a repeat issue in the past, and the new software was meant to update and streamline every aspect of the district’s operations. Former Superintendent Diana Greene sold the project to school board members in 2016, presenting a hopeful budget of less than $10 million.

When the ERP system did launch, it was behind schedule and millions of dollars over budget.

Greene left to become the leader of Duval County schools on the same day Manatee launched its new software, handing over the reins to now-Superintendent Cynthia Saunders. The cost had nearly tripled, and though the project technically ended in 2018, the process is very much ongoing.

The journey to replace Manatee’s business management system, known as enterprise resource planning software, is commonly referred to as the ERP project.

“For $27 million or $30 million, whatever we’ve now spent on this, to do ad hoc reports to meet the needs of routine financial transactions, reports and reconciliations is, quite frankly, near inexcusable,” said Scott Hopes, a school board member.

“The prior administration said the new system was going to solve all these problems, but what happened is the new system basically replicated the problems because, as I’ve said in the paper and many times, it was poorly planned,” he continued.

Hopes made the comments during a Jan. 13 meeting of the Audit Committee, which became aware of the reconciliation issue after a recent audit. Joined by several district officials, committee members discussed the critical finding by Carr, Riggs and Ingram, the internal auditor for Manatee schools.

According to auditors, the issue is likely isolated to the school district’s “concentration bank account,” which houses millions of dollars to cover employee salaries and other transactions. In its response, district officials said the majority of Manatee’s cash is housed in investment accounts, which were all reconciled.

When internal auditors wrote their draft report in December, the amount of unreconciled transactions was “extremely significant,” according to auditor Lorri Kidder, who spoke at the committee meeting earlier this month. She did not name a specific dollar amount, nor did the report.

“For the district account, we are down to a very immaterial amount, about $82,000 unreconciled,” said Tammy Taylor, director of finance for the school district.

While the issue is complicated, one of the main focuses is an integration issue between different parts of the software, according to auditors. They said payroll transactions in the Human Resources Department cannot be automatically transferred and reconciled in the Finance Department.

When the information is exported and given to the correct department, Taylor said her finance staff is bogged down with the large “data dumps.” Instead of having the ability to automatically filter reports using specific criteria, they have to manually comb through the data and find the relevant information, she explained.

“They’ve made a lot of progress and worked very hard on that,” Taylor said. “We’re down to a very small amount on the concentration account.”

The current amount of unreconciled transactions may pale in comparison to the original amount, but a smaller number did not equate to a small problem, committee members responded.

“I keep hearing how it’s not that much money,” committee member Susan Agruso said during the recent meeting. “If it isn’t zero, it’s a problem. If the accounts are not balanced to zero, it’s a problem.”

“I know your team is doing everything they think they can and putting in crazy hours, but this has to be fixed,” Agruso continued. “This is the financial controls of the school district that aren’t functioning properly.”

Reconciliation was an issue for the school district in past years. Near the end of 2016, Manatee had trouble with its outdated software system, and the checks issued to employees did not match the check numbers recorded in the district’s system.

Several committee members feared the new system was heading in the same direction as its predecessor. The old software became highly customized and overly complicated over its lifetime, often to meet the short-term needs of the district while sacrificing its usability in the long run.

“I find this really frustrating,” committee member Barbara Vedder said at the recent meeting. “Except for getting your employees paid, I can’t think of anything more important than reconciling these cash accounts. This system has been up a year and eight months.”

In a follow-up interview on Wednesday evening, the school district’s chief financial officer said Manatee was following auditors’ recommendations. Heather Jenkins said the district was working with its maintenance provider, Agitech, to catch up with reconciliations and fix the broken process.

Primarily, she said the company would create a “query” based on district specifications, helping her department filter through copious transactions in the system.

While the company took heat from certain committee members earlier this month, Deputy Superintendent Doug Wagner spoke highly of Agitech. He said district officials met with the company every week to prioritize issues.

Addressing frustrations about the ongoing problems, which existed 18 months after the software’s launch, Wagner said the district was juggling a host of day-to-day operations while trying to fix the technology headaches.

Responding to a question during the Jan. 13 meeting, Wagner said he could provide an action plan before the Audit Committee’s next gathering.

“You can hold me accountable for it personally,” he said. “I will guarantee what is on those actions plans are getting done.”

This story was originally published January 23, 2020 at 8:28 AM.