THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Sunday, November 5, 1995 TAG: 9511050064
SECTION: FRONT PAGE: A3 EDITION: FINAL
SOURCE: BY VANEE VINES, STAFF WRITER
DATELINE: VIRGINIA BEACH LENGTH: Long : 110 lines
School Board member Donald F. Bennis could have been speaking for many city leaders Saturday when he summed up his reaction to a school district audit released a day earlier:
``I think it does a good job of answering the what,'' said Bennis, an attorney and board freshman, ``but it doesn't necessarily give the who or the why.''
The audit revealed that the district overspent its 1994-95 budget by $12.1 million.
The deficit represents 3.6 percent of last year's $340.8 million budget - or enough to pay for building a new elementary school and half of another. KPMG Peat Marwick, which conducted the audit at the city's request, will formally present its findings at the board's Tuesday meeting.
Several School Board members interviewed Saturday said they embraced the audit's recommendations. But, like Bennis, they said they needed time to meet with peers on the board and the council to discuss where to go from here.
Should the board use the audit as a reason to clean house? Should the board try to find out who did what to whom and why? Should the board simply view most of the problems as mistakes of the previous superintendent? The audit doesn't say.
But, if nothing else, the audit makes clear the need for district administrators and board members to huddle with City Hall staffers and figure out which of the audit's recommendations should be acted on and at what price, several board members said.
The financial crisis also appears to have left board members much more concerned about making sure the new superintendent fully understands school finance issues.
Former Superintendent Sidney L. Faucette resigned this summer and took a job in Georgia. James L. Pughsley is serving as interim superintendent while the board sizes up candidates.
``We need a superintendent who believes in being accountable and has integrity. That's one of the first things to help us get back on track,'' said board member Tim Jackson.
Many school officials have attributed the financial problems to Faucette's alleged deficit spending habits or alleged refusals to fully disclose key financial information to the board during his four-year tenure.
Last month, the board approved cost-cutting measures recommended by top administrators who wanted to prevent a potential $6.6 million deficit this school year. The measures could save about $5.3 million. Another round of $1.3 million in cuts is planned for January. None of the anticipated savings, however, addresses last year's $12.1 million deficit.
The audit said the 1994-95 deficit stemmed from a $5.7 million shortfall in estimated income and a $6.4 million increase in unbudgeted personnel and other expenses. In most cases, the district apparently counted its eggs before they were hatched or failed to make realistic financial projections.
While it didn't point fingers at particular employees, the audit did offer suggestions aimed at putting the district on more solid ground.
For example, it urged the administration to:
Give those who oversee budgets ``primary authority'' for their budgets and the power to approve all expenditures charged to their budgets.
Give the School Board financial information that more clearly lays out spending patterns.
Decrease and monitor the number of budget adjustments it makes during a fiscal year.
Chief Financial Officer Mordecai L. Smith, who was placed on administrative leave in September, said that after Faucette left, the district took steps to address problems.
Smith said he and other top administrators decided to give the board ``cost implication'' statements for all proposals or plans, for example.
Pughsley declined to discuss the audit before Tuesday. Faucette could not be reached for comment.
State schools chief William C. Bosher Jr., reached at home Saturday, said he wasn't familiar with details of the financial pinch in Virginia's second-largest district. But the situation is troublesome, he said.
``I have been alarmed not only by the reality of having this happen, but also with the fact that it happened in a historically outstanding school division known for frugality,'' he said. ``My hope will be that the historical likeness of an (Edward E.) Brickell is the kind of history that will again emerge in Virginia Beach.''
Brickell served for about 19 years as Beach schools superintendent. In the eight years since he resigned in 1987, three others have held the position full-time; a fourth superintendent will be named this school year. Brickell is now president of Eastern Virginia Medical School in Norfolk. ILLUSTRATION: Graphic
AUDITORS' ADVICE
In its audit report sizing up the school district's financial
fitness during the 1994-95 fiscal year, KPMG Peat Marwick found that
the district often overestimated revenue or spent more than the
amount budgeted. The firm's report includes several recommendations
to put the district on less shaky financial ground. Among them:
Prepare - and save - worksheets that show how budget revenue and
expense figures were calculated. In some cases, make the worksheets
available to anyone responsible for overseeing payroll expenses.
Make sure administrators who are responsible for managing budgets
get two years of historical financial data to help them figure out
how much they should earmark for non-payroll expenses.
Give administrators who are responsible for managing budgets
``primary authority'' over their budgets.
Report financial information to School Board members in a simpler
way that also makes it easier for them to spot patterns.
Give the board information showing cumulative (to-date) budget
transfers that affect major parts of the overall budget.
Consider buying an ``integrated position control system'' that
would allow the district to simultaneously track payroll, personnel
and other expenses in relation to approved budgets.
KEYWORDS: VIRGINIA BEACH SCHOOL BOARD BUDGET by CNB