BRADENTON - At Monday's workshop meeting, Leann Cross and Tommye Barie of accounting firm Mauldin & Jenkins presented their long-awaited external audit report on the Manatee school district's faulty 2012-2013 budget.
From the dais, the representatives from the firm reviewed the report's three documents: an Audit Agenda, a Comprehensive Annual Financial Report, and a Compliance Report. Cross went through several discrepancies found in the district's budget, including a finding that sales tax proceeds to the distrct "were being used to pay the costs of an operating lease agreement for copiers at various locations throughout the District", at a cost of $919,000 for the current fiscal year, and that such activity has been going on since 2009.
It was also discovered that the district was paying employees retiring through the Deferred Retirement Option Plan, an amount in excess of the set limit of 60 days of actual payment that is stated in Florida Statue 1012.65. This excess spending has cost the district about $64,000 since the 2011-2012 school year, according to the audit.
In regards to the district's inital reporting of a $9.5 million balance for its budget for the 2012-2013 school year, Cross said that, among other things, there was not enough monitoring of budget expenditures throughout the year, which contributed to the misstatement of the numbers of the budget.
Though the majority of the presentation and interactions went smoothly, a bump was hit when the Cross advised the board that M&J had been informed prior to June 2012 that the district's workers' compensation self-insurance fund was adequately funded, but that on June 30, the fund reported a deficit of more than $2 million.
When board member Julie Aranibar asked who had informed the firm that the fund was well-financed, Cross said that Finance Director Angela Fraser had. (To which Fraser, two rows behind Cross, seemed to say, "No, that's not true.") Cross then said that the original adjustment made in the self-insurance fund which led to its deficit was done by former Superintendent Dr. Tim McGonegal.
When Cross and Barie returned to give a summary report during the board's regular meeting on Monday evening, board member David Miner asked why Mauldin & Jenkins had waited several months to deliver the report, saying that it would have been helpful for the board to have the report much earlier. Cross responded by saying that when the board initiated a forensic audit, Mauldin & Jenkins pulled out of their external audit for a few months so that Navigant "could complete all of their procedures" without interference, thus causing a delay in completion of the external audit.
During the workshop, Superintendent Rick Mills referred to the recommendations made by the auditors in their report with regards to what the district should do to prevent budgeting mistakes moving forward. He said, "One of the focuses I wanted to see today was to have board ask questions, flush out issues, concerns...(and gain) a greater understanding and clarity in how we're going to resolve these issues and move forward. The plan is to get feedback from the board and auditors today and put together a comprehensive plan that gives greater details on the (recommendations) given in the report."
Mills said he intended to meet on Thursday with the district's senior staff and create a report that determines the persons responsible for the reported budgeting errors, and that he would have the report for the board by Friday.