Audit findings cost school district $7 million

EAST COUNTY — Years of financial mistakes and overspending will cost the Manatee County School District $7 million this year, preventing it from meeting the state-required minimum fund balance —the amount of money secured as reserves— for the fourth consecutive year. 

As a result of two audits from the State Auditor General’s Office which detailed major financial errors incurred during the years 2005-12, the school district must take away $7 million from the general fund of this year’s budget and restore it to other parts of the budget that were depleted and mismanaged, such as its sales surtax account. 

It must restore the funds to those accounts before the end of this fiscal year.

The money does not leave the district, but depleting the general fund has a similar effect to a fine. 

Since January, Mills, who was hired in March of 2013, had been working with the Florida Department of Education to minimize costs associated with the audits, and to limit the impact on this year’s budget.

But in a May 1 letter to Mills, Linda Champion, deputy commissioner of finance and operations with the Florida Department of Education, delivered a harsher reality. 

Prior to the news from the state, the district had projected to have an $8.1 million surplus in its fund balance by June 30 — the end of the current fiscal year.

But now, the district projects to only have about $1 million in reserves by that time.

Despite falling short of the required fund balance, Mills — speaking at a press conference Friday surrounded by his senior leadership team and two school board members —projected confidence in the district’s ability to recover from its latest setback.

“One of reasons this news was painful and disappointing is that a lot here have worked hard to improve the financial standing of the district,” said Mills, who stressed the district would not be subject to state takeover as a resulted of failing to meet minimum reserves again. “At least now there is a sense of relief about knowing exactly where we stand, and we can focus on moving forward. We will prevail over this challenge.”

Mills said he expects the district to meet the 3% minimum fund balance – which equates to $10.3 million — in next year’s budget. 

Because the school district’s fund balance carries over year to year, the district must come up with about $9.3 million to get there.

The school district has already begun planning next year’s budget and has made several moves to save money, such as selling excess fleets and surplus property, leaving district office positions open and nonrenewing the contracts of some teachers. 

In a workshop next week, the school district will discuss ways to save more money — by doing as little harm to the classroom as possible.

“I would not want (staff) cuts,” Mills said.  “I am confident we can make these (budget) adjustments without doing that. My goal is to reinvest in employees. I want to make adjustments furthest away from the classroom.”

For more on this story, read the May 7 East County Observer.  

Contact Josh Siegel at [email protected].