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Superintendent Rick Mills, center, flanked by his senior leadership team at a press conference Friday, said the school district remains upbeat about the future. Photo by Josh Siegel
East County Wednesday, May. 7, 2014 3 years ago

Audits cost district $7 million

by: Josh Siegel Staff Writer

EAST COUNTY — Don Hall, shoulder to shoulder beside his boss, stood with his eyes closed, and hands folded — a meditative pose that suggested a leadership team exasperated by paying the price for mistakes of the past, but searching for strength to move foward.

Sounding frustrated yet resolved, Rick Mills, superintendent of the Manatee County School District, announced the latest — and likely last — setback to his attempts to rectify the district’s budget.

Speaking at a press conference May 2 surrounded by his senior leadership team — including Hall, the deputy superintendent of operations — Mills announced that years of financial mistakes and overspending will cost the school district $7 million this year, preventing it from meeting the state-required minimum fund balance — or reserves — again. 

As a result of two audits from the State Auditor General’s Office that detailed major financial errors incurred during the years 2005 through 2012, the district must restore $7 million to past budgets, replacing money in mismanaged accounts, before the end of this fiscal year, June 30.

The money will come from the general fund of the current fiscal year budget.

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

“One of reasons this news was painful and disappointing is that a lot of people 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.”

Since January, Mills, who was hired in March 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.

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.

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

Mills projected confidence in the district’s ability to recover from its latest setback.

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 cut $9.3 million in the 2014-15 budget to get there.

The district has already begun planning next year’s budget and already has made several moves to save money, such as selling excess fleets and surplus property, leaving district office positions open and not renewing the contracts of some teachers. 

Going forward, Mills vows to do 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.”

By the numbers
In December, the State Auditor General’s Office released two reports— one on operational funding and the second on federal, grant-funded programs — that detailed years of mistakes caused by poor record-keeping and misused spending.

$4.1 million — The amount of restoration assessed against the district as a result of the operational audit

$2.9 million — The amount of restoration assessed against the district as a result of the federal audit

$7 million — The total amount assessed against the district, to come from the general fund of the current fiscal year

$9.3 million — The amount of money the district must cut from next year’s budget to meet the minimum state-required amount of reserves.

Contact Josh Siegel at [email protected].


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