School District Auditors Find Flawed Budgeting System

Auditors said there was no evidence of criminal wrongdoing, despite pervasive accounting errors and a failure to immediately report mistakes to the school board.

Auditors who examined the Manatee County School districts finances said there was no evidence of embezzlement or criminal wrongdoing, even though there were so many problems with the budget system the district lost nearly $33 million in one month.

Navigant, the Chicago firm hired to conduct the audit, found that the finance department used an obsolete soft ware program that "could not add or subtract, and could not be relied upon for budget preparation."

That software was one of the factors that led to the school district reporting a revenue surplus of $17.6 million on April 30, 2011 and then a month later on May 31 reporting a $15.2 million deficit, a nearly $33 million difference.

The Bradenton Herald reported that the committee placed much of the blame on Jim Drake, the assistant superintendent who led the district's finance department.

The Sarasota Herald-Tribune reported the major audit findings that include:

• A flawed budgeting system that failed to account for $5.2 million in employee health care and other benefits.

• Budget managers assumed an across-the-board teacher pay cut was retroactive, when it was not, meaning the schools had not saved $2.4 million. The district also hired 15 elementary school teachers to comply with class size requirements, but did not include them in the budget resulting in another $926,000 that was not included in the budget.

• The school district also failed to include $376,000 spent on text books, a $250,000 program for at-risk studentsand $650,000 for "virtual schooling."

• The audit also found that the district's finance manager was not directly involved in the budget process.

Bay News 9 reported some Manatee County citizens blasted the report and said it doesn't go far enough.

Even though auditors uncovered a deeply flawed budgeting process and delays in reporting the problems to school board members, Navigant found that there was no evidence of embezzlement or criminal wrongdoing.

Mike B January 16, 2013 at 12:01 PM
Excellent summary of the report, except the report failed to recognize there were no less than 5 levels of supervision of Mr. Drake that failed to find and/or report these errors. Mr. Drake was supervised by the superintendent, a financial "guru", and internal auditor, the audit committee, the local accounting firm hired to audit the MCSD, and the board who were repeatedly warned of the accounting errors.
canary January 23, 2013 at 09:00 PM
They still will not account for the failure to listen to the public for over a decade that there were budget and spending problems. The statement is "the public needs to have our back" is obsolete. They have to earn our trust and our respect. Since they "stonewall" the public I would say they really aren't too interested in our opinions.


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