Budget audit under way

MANATEE COUNTY — A forensic audit of the Manatee County School Board’s finances has officially begun.
Auditors from Navigant, the independent company hired to conduct a forensic audit, were present at the School Board’s Administrative Building Monday, Oct. 19, and have begun collecting information, conducting interviews and compiling other information needed to deem how the school district suddenly found itself short $3.4 million last month.

At the Manatee County School Board meeting Monday night, Manatee County Schools Interim Superintendent David Gayler also said his initial review of the budget confirmed something he already suspected: The district is lacking an FTE, or a full-time equivalent coordinator, who is responsible for ensuring the district verifies student counts with the state and makes sure the district is receiving appropriate compensation. Currently, the responsibility is spread across multiple employees, and counts and FTE funding may or may not be accurate, he said.

“It’s important to get every dollar this district is entitled to,” Gayler said. “This district needs an individual who is responsible for that.”

The district also has held empty a position control post, he said — a point raised by Assistant Superintendent of Teaching and Learning Bob Gagnon, while he served as superintendent on an interim basis until Oct. 15. The position helps ensure employees are being utilized properly.

“There’s no question that contributed (to the budget situation),” Gayler said. “I think those functions disappeared in the realms of (budget cuts). In that swirl, those functions were lost. We have got to get that back.

“That’s at least part of the budget issue,” he said. “These are processes that have been lost over the years.”
Gayler said he is already working on a plan to correct those items.

School Board members and the public learned the School District was facing a roughly $3.4 million deficit Sept. 7. Superintendent Tim McGonegal resigned suddenly, three days later.

School Board members agreed to have an independent forensic audit of the district’s finances completed to figure out how the mistake could have occurred and when. The board recently hired the law firm of Trenam Kemter to oversee the auditing process and through Kempter hired Navigant earlier this month, at the recommendation of a recently established Audit Committee.

Maulding & Jenkins, a local firm that has been conducting external audits of the district’s finances for about eight years, called an impromptu meeting of the Audit Committee Oct. 17, at which time the company said it believes the district’s financial problems are larger than previously reported. The district showed $11.3 million in unbudgeted expenditures last year, which would have translated into a $5.3 million deficit, not $3.4 million.

The company said expenses not budgeted included almost $6.3 million in salaries and benefits for workers’ positions that were funded by stimulus dollars that ended this summer; $2.9 million for salaries and benefits for 58 teachers hired in fall 2011; and almost $2.2 million for salaries and benefits restored when the district avoided a 1.75% retroactive pay cut.

School Board Chairman Harry Kinnan said the news, while surprising, further showed the district’s finances and accounting systems need scrutiny.

“I felt it was very appropriate of (Maulding & Jenkins to bring this forward),” Kinnan said. “Is it an accounting problem or a finance problem? We need to know if there were warning signs. I’m glad Mauldin & Jenkins (shared this information). It adds to the accumulation of information (we have).”

The firm is expected to hold the results of its audit until the forensic audit by Navigant has been completed.

Contact Pam Eubanks at [email protected].