THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Tuesday, September 26, 1995 TAG: 9509260289
SECTION: FRONT PAGE: A1 EDITION: FINAL
SOURCE: BY ALETA PAYNE, STAFF WRITER
DATELINE: VIRGINIA BEACH LENGTH: Medium: 74 lines
Mordecai L. Smith, the school district's chief financial officer, has been placed on paid administrative leave one month after school officials went public with a $7.4 million budget shortfall.
Smith was a key player in the budget drama. He had assured the district's top leaders just days before the deficit was disclosed that the books for the 1994-95 fiscal year would end with a surplus. Instead, school officials had to go before the City Council to request additional money to resolve the largest financial crisis in the division's history.
``I feel that I've done nothing wrong,'' Smith said Monday evening. ``I just want a full disclosure of the facts. I'd rather not speak any further. I'm protecting myself.''
Smith has said he had planned to cover the deficit by shifting money from a group of special accounts. But city finance officials have said the money was not there to transfer.
Interim Superintendent James L. Pughsley, whose signature was on the letter informing Smith of the decision, declined Monday evening to discuss the matter because it is a personnel issue.
Board member Donald F. Bennis would not say whether he or his colleagues had pushed for Smith's forced leave. However, he acknowledged that ``there have been some concerns about Mort's performance, and that has been expressed to the administration.''
But at least one board member disagreed with the decision.
``I'm very displeased about that,'' said board member Ulysses Van Spiva, who called the decision premature. ``We haven't done a complete audit yet.''
The school division is conducting an investigation into the deficit and the City Council has ordered an expanded external audit.
Placing Smith on leave was reminiscent of his predecessor's departure. Hal Canary was put on leave before being fired a year ago. Internal memos released since that time show that Canary had alerted Sidney L. Faucette, then superintendent, to several financial problems that later would resurface as factors in the deficit.
``It sounds like a familiar path,'' Canary said when told that Smith had been placed on leave. He declined to comment further.
Faucette left the Beach schools in July to head a district in Georgia. In his last months leading Virginia Beach, the state's second-largest school district, Faucette had warned of budget problems, and strict spending measures were put in place. However, both he and Smith repeatedly assured board members that the fiscal year would end with a surplus. Faucette has since said that he was relying on information supplied to him by Smith.
The deficit resulted almost equally from overspending and a funding shortfall. Initial investigations show a trend of unbudgeted expenditures and miscalculations on staffing and federal aid. Some of those problems preceded Smith's tenure as chief financial officer, a job he inherited on an acting basis last August. He was unanimously appointed to the post by the board in February, and also has served as director of budget development and director of accounting since then.
Smith, a graduate of Norfolk State and Old Dominion universities, is the only administrator in the school division's finance office to outlast Faucette's tenure. His future with the school system remains unclear, and officials declined to say who would step into his role as chief financial officer until a decision is made. ILLUSTRATION: Photo
Mordecai Smith
``I feel that I've done nothing wrong. I just want a full disclosure
of the facts.''
KEYWORDS: VIRGINIA BEACH SCHOOLS DEFICIT BUDGET by CNB