THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Wednesday, September 6, 1995 TAG: 9509060426
SECTION: LOCAL PAGE: B3 EDITION: FINAL
SOURCE: BY ALETA PAYNE, STAFF WRITER
DATELINE: VIRGINIA BEACH LENGTH: Medium: 79 lines
The School Board and City Council met in separate sessions Tuesday, but both were still preoccupied with a common crisis - the school district's $7.4 million deficit from the past fiscal year.
In the strongest language used since the depth of the division's fiscal problems became public 10 days ago, some school administrators and board members acknowledged at a special afternoon session that some of the budget information given to them was misleading. The board agreed to have the interim superintendent investigate an offer of a free, independent audit of the school system's financial records for the past several years.
Almost simultaneously, in a meeting a few hundred yards away, the City Council decided unanimously to expand the city's annual audit to include a more detailed analysis of the school district's finances. The auditor also was asked to review new financial control measures implemented since the money trouble was discovered.
The council did not vote, however, on providing the money needed to cover the budget shortfall. Members plan to do so at their meeting next week after a city staff briefing on a two-week investigation into the problems and suggestions for long-term solutions.
Interim School Superintendent James L. Pughsley told board members that much of the information was available for the thorough investigation he pledged.
Pughsley, on board as superintendent since July, said he didn't want to bog down internal staff members with the investigation. He said he wants ``the chips to fall where they may,'' an apparent reference to the need for someone independent of the district in that role.
At the regular board meeting later, three speakers called for the resignations of the nine board members who have served at least one year. Board members did not respond to the demand.
During the earlier budget session, board members were told by Chief Financial Officer Mordecai Smith that some of the budget information they were given previously was misleading.
``There often have been projects and programs brought to the board without full disclosure of the budget impact,'' Smith said. ``With Dr. Pughsley in place, that hasn't happened.''
Smith told the board specifically that budget information regarding a custodial contract was adjusted to make it appear that the district was saving money with an outside contractor.
Board members repeatedly asked why they weren't given various reports and other information, only to have staff respond that, in most cases, others held their jobs at the time decisions were made.
``I think the people who meant to keep this from us, I think some of those people are gone,'' board member Tim Jackson said. ``It is almost corrupt for someone to tell us we're in the black when we're actually in the red.''
Former Superintendent Sidney L. Faucette, who left in June to head the schools in Gwinnett County, Ga., had warned board members that the district faced financial problems. But he also had assured them that the district could finish the year in strong financial shape if certain cost-cutting measures were taken.
Faucette has not returned repeated phone calls.
Smith also had assured the board that the year would end with a surplus, until days before the crisis became known. He and other administrators have blamed the shortfall on overspending, and on revenue projections that did not pan out.
Some board members said the city should take part of the responsibility for the financial mess. The district budgeted $15.6 million in federal aid, including ``impact aid'' that goes to districts with large enrollments of military dependents. The school system has never received that much money and got only $10.7 million this year.
Told that city officials were aware that impact aid might fall short, board member Robert W. Hall said, ``This (budget crisis) comes up, and they act like it's a big surprise, and it isn't. MEMO: Staff writer Karen Weintraub contributed to this report.
KEYWORDS: VIRGINIA BEACH SCHOOL BOARD BUDGET DEFICIT by CNB