The Virginian-Pilot
                             THE VIRGINIAN-PILOT 
              Copyright (c) 1995, Landmark Communications, Inc.

DATE: Tuesday, August 29, 1995               TAG: 9508290010
SECTION: FRONT                    PAGE: A10  EDITION: FINAL 
TYPE: Editorial 
                                             LENGTH: Medium:   59 lines

VIRGINIA BEACH SCHOOLS A BROKE SCHOOLS

For Virginia Beach schools, fiscal year 1994-95 began with $2.3 million in bills left over from 1993-94. Fiscal year 1994-95 just ended $7.3 million in the hole. Nobody's surprised - except the School Board.

That's one indication of the extent of the problems. Here's another: Deficits in school budgets are illegal; a school superintendent and members of a school board may be guilty of malfeasance in office. Board members seem as interested in covering their hides with outside counsel (Who's paying him?) as in covering the school debt. It's a little late for both.

Jim Pughsley, who last month succeeded Sid Faucette as superintendent, went before City Council yesterday to explain what happened, how and why - and to get Council to cover that $7.3 million debt. He left Council chambers without a check.

Unpaid school bills hurt the city's bond rating. But Council can exact a price for picking up the schools' debt, and it wants reassurance that the mess (a) is mopped and (b) won't recur. That reassurance begins with consolidating school and city financial record-keeping, a thorough outside audit of school finances and a long, hard look at whether heads should roll in departments demonstrably incompetent at drawing a realistic budget and abiding by it.

``We're trying to change a culture,'' Dr. Pughsley told council. He can start with an atmosphere that encourages school employees not only to do right but to report wrongs.

The School Board has voted to study consolidating financial services and to expand the scope of the usual outside audit. It has directed Dr. Pughsley to investigate what went wrong and endorsed the corrective measures proposed so far.

What the board hasn't done, so far, is accept its own responsibility. Just three weeks ago, board members insist, they were assured of a surplus of at least $400,000. Just last Friday they learned different. Yet it was clear long ago that major unbudgeted and unauthorized expenses had occurred, that every possible Peter had been robbed to pay Paul and still the school year would end either in deficit or too close to be comforted by then-Superintendent Faucette's assurances to the contrary.

Yet yesterday Joe Taylor could both pronounce himself ``thoroughly embarrassed as a board member'' and excuse himself as one of two members on the board's budget committee: ``We're only as good as the information we get,'' he said yesterday.

Sometimes the information gotten is only as good as the questions asked.

Vice Mayor Will Sessoms asked a question yesterday the board had not: ``How do you spend $7.3 million you don't have?'' All too easily, apparently. But the what, how and why the system is broke and how it should be fixed are only part of what the public needs to know. It also needs to know who, and missing from among the men on Council's carpet yesterday was the man who most belongs there: Sid Faucette.

KEYWORDS: VIRGINIA BEACH SCHOOLS BUDGET by CNB