BRADENTON – The Florida Auditor General has issued initial findings and recommendations in its Operational Audit of the Manatee County School District for the fiscal year that ended this June (click here to read PDF). The audit, which began this past March and focuses on the 2012-2013 school year, also addresses MCSD financial matters dating as far back as the 2005-2006 school year.

The district could face as much as a $7.2 million reduction in its general fund balance as a consequence of the audit findings. The district has 30 days to review the issues and explore the possibility of mitigating some of the questioned costs. District officials say they believe the financial impact of the initial findings can be reduced and plan to respond to the findings by December 20, 2013.

“We welcome the opportunity to work with the Auditor General to remediate many of the report’s findings,” said Superintendent Rick Mills in a release. “I cannot emphasize enough that the school district is dedicated to fiscal responsibility and avoiding costly decisions and oversights that continue to plague the district from past years. We are committed to overcoming this challenge and keeping the school district on the path of fiscal discipline as we move forward together to the greatness our students and community deserve.”

The $7.2 million figure consists of $5,482,004 of questioned capital funds that may not have been spent in accordance with funding guidelines. This may require reinstatement of costs from the general fund. In addition, there was a workers compensation fund deficit of $1,712,448 which will require the majority of repayment to come from the general fund over the next two years. 

The above items, plus approximately $65,255 in purchasing card rebates owed to other funds amount to $7,259,707 in possible repayment from general funds. The district says it has already programmed $724,788 in workers compensation repayment funds in this year’s budget.

The audit also revealed another potential $1,743,659 of questioned costs in capital funds that may not have been spent in accordance with funding guidelines. Those costs may be absorbed by other capital funds and should not impact general fund dollars.

The timeline of the findings cover multiple administrations, including Dr. Roger Dearing who served as superintendent until 2008 and his replacement Tim McGonegal, who was hired later that year and served until resigning after finally acknowledging at least some of the district's financial straits in September of 2012.

The district was then run by a series of interim superintendents until Mills took over in late March of this year. Mills and his staff successfully repaid more than $7 million that the district owed for 2012-13, while building up what would have been a $9 million reserve.

As bad as the news may seem, it could get worse. In addition to the state auditor general's finding, an additional report will be released at a yet undetermined future date and will include federal audit findings, which could also contain significant financial consequences for the district from both current and past school years.

related:

School District Continues to be Plagued by Past Misdeeds