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News Section: Opinion



Ultimate Accountability Seems Unlikely in School District Financial Woes

State and Feds should investigate

Published Sunday, February 16, 2014 12:10 am
Dennis_Maley_Image

Like most people in Manatee County, I am deeply disappointed that the tens of millions of dollars in financial mismanagement that has brought our school district to its knees has not been followed by an equally profound dose of comeuppance for those responsible. As sad as it seems, even as we continue to suffer as a district for those past mistakes, there seems little chance those responsible will be held criminally accountable – no matter what efforts the board and district might make.

In the wake of revelations that the books had been cooked under the former administration headed by ex-superintendent Tim McGonegal, the board spent more than $250,000 on a forensic audit that did little more than point out the myriad of poor or absent budgeting policies that had been mostly understood by that point, while announcing that no evidence of criminal embezzlement was found. That's where things get dicey.

Had this been a classic case of administrators using public funds as their personal piggy banks – buying sports cars and jewelry, taking trips to the Caribbean with the receptionist, dumping taxpayer cash into offshore accounts – the criminal statutes involved would have been easy to enforce and someone would have been perp-walked out of the big gold building with their sport coat hanging over their wrists to cover the handcuffs.

What we have here, however, is quite different and seems not to be as black and white, at least in a legal sense. At the heart of most people's difficulty in grasping this frustrating reality, is a lack of understanding as to what actually occurred. Where did the money go? is the most frequent question I hear from readers. If that much is missing someone had to be taking some they insist – not an unreasonable assumption to be sure.

To begin to understand the situation, one has to start with acknowledging the vast complexity of school budgeting, especially in a large district. School budgets are not simple ledgers with credits and debits. As such, thinking of them the way you would your checkbook or even the accounts at your business is not a useful analogy. They deal with a multitude of funding sources, each with their own unique stipulations. Money comes in from many different places at all different times and goes out in a similarly convoluted fashion. Merely answering the question how much money do we have right now? at any given moment in time, is indeed a complex exercise in itself as you will notice in board updates.

What happened in our district is that the budgetary process had been profoundly (and often deliberately) corrupted in a way that allowed the administration to hide both expenses and expenditures (via "mistakes") to make it seem that it could afford a level of spending that was, in reality, far beyond its means. A vast array of shell games gave McGonegal and company the ability to show the board a healthy budget with ample reserves, while it asked board members to approve expenditures it could ill afford. He also leveraged this seemingly flush picture into promotions and financial rewards for a preferred clique of insiders who were routinely shuffled into highly-paid postitions for which they seemed questionably qualified.

That's at least where the greatest ethical crimes seem to have occurred. Even if some honest negligence or incompetence got the ball rolling and they really did think they could right the ship, McGonegal and company recommended spending that the board approved, without empowering them to cast an informed vote. Isn't that illegal? you might ask. I should hope so. Was there criminal malfeasance, misfeasance and/or nonfeasance involved in the decisions that were made? Again, it certainly seems so, though there doesn't seem to be a clear legal answer as of yet.

 

Last week, the board chair and superintendent asked Florida Commissioner of Education Pam Stewart to investigate such culpability, but at Tuesday's meeting, a debate erupted as to whether the district itself had done enough to discover evidence that would lead to criminal accountability. It's easy to see why many people would adopt a whatever it takes attitude in terms of chasing down the culprits, but this is where the rubber meets the road in terms of idealism vs. pragmatism.

 

It seems likely that a more detailed forensic audit would cost many times the quarter million dollars spent on the last one. This is money that the district simply does not have. Furthermore, the district's job is to clean house and put in place measures to prevent future catastrophes, not to solve complex financial crimes. Is that a good enough reason to let such crimes go unpunished? Probably not – at least if there is a fairly decent chance that such efforts would lead to criminal charges. I just don't see a compelling argument that such will be the case. 


Having been employees of the school district at the time, those involved would seem to be covered by the umbrella of the school district's legal defense, as well as its insurance. That means that the district itself could end up covering all costs to all parties, significantly compounding an expense it already can't afford. Given what we know already, any such investigation would also seem likely to uncover even more errors, all of which would have to be reported to the state, which could lead to even more findings (meaning potentially millions of dollars in additional fines). As the board is currently hoping the state will relieve at least some of that burden, it is understandable that it would not be eager to add to the tally.

Whether the board was duped or not, their complicity in voting to approve McGonegal's actions also provide some modicum of cover. That being said, unless something is found beyond that which we would expect to find at this time, the district could end up spending millions of dollars, ending up in a significantly worse place than it is now, and still not see anyone responsible wearing an orange jumpsuit. Given our dire financial straits, this seems akin to burning half of your house to catch mice that might be in one of the walls, and doing it when you're already three months behind on the mortgage.

Again, I'd like to see someone wearing jail bracelets as much as anyone, and I believe that when it comes to this topic, I've been dogged enough in this column to make that statement very credibly. However, what I want to see even more than that is our classrooms rebound from this crisis and improve drastically from their dismal 54th place ranking. Those goals of accountability and excellence should not be mutually exclusive; in fact, they should go hand in hand. But should is a word one finds themselves substituting for is all too often in this world.

Moving forward –  putting this behind us; these are all terms that stink of whitewash and cover-up, efforts to sweep the truth under the rug so that the well-connected never end up facing the consequences of their actions. The fact that many of the voices on the board now uttering them the loudest were the most complicit in enabling McGonegal's disasters, make them no easier to swallow. Nonetheless, after much deliberation, I just don't think that the desired outcome is in the cards and am in no mood – as a parent, a citizen or a taxpayer – to burn down the house in order to catch the mouse.

 

In a addition to putting in place viable budgetary procedures, we now have a real budget committee that is not chaired by the superintendent and stacked with his friends, an outside firm accountable to the board that performs the internal audits, so that problems can be spotted and corrected before they leave the district, and the district has created a budgetary director so that accountability for this vital function is clearly defined  a role that was unthinkably absent in the past. In other words, the notion of prevention seems to have thrived, even if cure has proven more elusive.


At this point, it seems that the FDLE or the feds are the only entities with the resources to pursue the criminal aspect further, and that's where the pressure needs to be placed. Any happy ending on this front seems at best ulikely to originate with further expenditures within the MCSD. The district would seem best served in focusing its efforts on continuing to recover, while also continuing to put in place policies and procedures that will ensure that something of this nature never happens again. That might not be a perfect outcome, or even the one we deserve, but it seems likely to be the best we are going to get. Like most of you, I don't like it – but that doesn't mean it isn't so.   

 

Dennis Maley's column appears every Thursday and Sunday in The Bradenton Times. He can be reached at dennis.maley@thebradentontimes.com. Click here to visit his column archive. Click here to go to his bio page. You can also follow Dennis on Facebook.

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Obituaries

Name Date
Aline Funk October 17, 2014
Alice Szakacs October 16, 2014
Deborah Snyder October 20, 2014
Donald Moen October 4, 2014
Edward Dey October 1, 2014
Harold Cooper October 4, 2014
Roberto Ramos October 7, 2014
Betty Schooley October 9, 2014
Eugenia Putvin October 11, 2014
All Obituaries






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