MANATEE -- Backed up against a state deadline and the recent discovery of a $3.5 million deficit in its reserve fund, Manatee County school board members will have to pass the 2012-13 school budget when they meet for the final budget hearing Monday.
What remains to be seen is how much money they can find between now and Monday to replenish reserves enough to meet the 3 percent level mandated by the state.
If board members and administrators can't find the estimated $5 million needed to reach that level, the board will still pass the budget, board Chairman Harry Kinnan said.
"We've been given flexibility by the state," Kinnan said. "We will continue to be able to amend the budget."
The state ruled Tuesday that the board is not bound to McGonegal's corrective action plan, which would replenish reserves to $5.7 million by June 2013. But McGonegal's bail-out plan, which only brings the reserves to 1.8 percent of the total operating budget, needs to be improved, board members have said.
Florida statutes require school districts keep their re
serves at 3 percent. If those reserves fall below 2 percent, the state must approve an action plan, or they may choose to assign a financial emergency board to intervene.
Right now, Kinnan said, the board is brainstorming ways to increase the reserves without doing harm to employees.
The board is holding an executive session today to decide how the reserve deficit will affect collective bargaining with teachers' unions, and will continue searching for ways to obtain extra funds.
School board member Karen Carpenter said she's looking through educational mandates and looking for areas that can be cut back that don't conflict with those mandates.
She said it has been a whirlwind of activity since Monday and looks forward to next Monday's night discussion, when the board wants to finalize the plan. She said she's not sure what would happen if the board could not come up with the necessary funds.
"I wish we had known in August when we were hiring people and doing contracts," Carpenter said. "We thought we were in Fat City. Not true."
The board also will hold a public meeting with the audit committee today to decide who will perform a forensic audit to investigate the cause of the budget deficit, which some officials have known about for at least a month.
Kinnan said Interim Superintendent Bob Gagnon will no longer make a recommendation based on the committee's thoughts on who should perform a forensic audit of the 2011-2012 year. Instead, the committee will recommend directly to the board. And when the results of that audit are eventually revealed, they will go straight to the board as well, Kinnan said.
"We think all decisions made on this should be independent of the administration," Kinnan said. "I think because these are unusual circumstances, this is the best option."
The public may speak at the meeting, Kinnan said, but only on how the role of the forensic audit should be defined. The meeting is at 11 a.m. in room 203 of the district administration building,
The deficit was caused when the district acquired $8 million worth of expenses during the 2011-12 school year, including the salaries of 58 elementary school teachers, but never budgeted for them.
The fallout from the announcement caused then-superintendent Tim McGonegal to resign Monday, just days after he announced that he planned to retire this February. Assistant Superintendent Bob Gagnon was approved as interim superintendent at Monday night's board meeting.
Katy Bergen, Herald education reporter, can be reached at 941-745-7081.