THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Friday, December 1, 1995 TAG: 9512010219
SECTION: FRONT PAGE: A1 EDITION: FINAL
SOURCE: BY ALETA PAYNE, STAFF WRITER
DATELINE: VIRGINIA BEACH LENGTH: Medium: 98 lines
Former school superintendent Sidney L. Faucette has told his bosses in Gwinnett County, Ga., that he was ``out of the loop'' in the budget process that culminated in a fiscal crisis for the school system here.
In his most aggressive defense since the discovery that Virginia Beach schools ended the budget year with a $12.1 million shortfall, Faucette this week implicated board members, other administrators and city leaders.
A special grand jury begins meeting Monday to investigate the Beach district's financial situation.
Faucette's remarks, made at public meetings in Gwinnett County this week and in a memo to the School Board chairman, come in the wake of mounting community pressure to explain his role in the fiscal mess here. Faucette stepped down from the Virginia Beach post in July to lead schools in Gwinnett, outside Atlanta.
``The financial management plan utilized by the Virginia Beach School Board in 1994-95 did not include the superintendent directly in the budget administration, including fund transfers, process,'' according to the memo Faucette wrote. ``The process was the following:
``Director of Budget Development (to) School Board Budget Review Committee (to) School Board.''
Berney Kirkland, director of community relations for the Gwinnett schools, said, ``That more or less took the superintendent out of the loop'' according to Faucette, who was unavailable for comment Thursday.
And, according to a published account and Kirkland, Faucette has said he lost confidence in Chief Financial Officer Mordecai L. Smith in mid-April, about six weeks after Smith was permanently appointed to that job, and Faucette gave James L. Pughsley, then the division's deputy superintendent, oversight of budget matters.
Pughsley has served as interim superintendent since July and is one of three finalists for the permanent job.
``That's very unfortunate,'' Pughsley said of the claim that he was in charge of the budget. ``And that's not true.'' He declined to comment further.
Faucette's memo further states: ``The City Council and its staff were fully aware of all revenue projections . . . and expenditure estimates before a budget was funded by City Council.
``Further, the school system was forced to use the City's financial system, which provided the City staff with ready access to the school system's business commitments, transactions, and revenue streams.''
City Manager James K. Spore could not be reached for comment Thursday. City officials have said they had no control over school spending beyond the budget's initial approval by council.
Virginia Beach board member Ulysses Van Spiva, who once served on the school budget committee, said it had ``no control functions'' over the budget and did not set policy. It was primarily a tool to review documents, study budget transfers and raise questions, he said.
The board dissolved the budget committee after Faucette left.
Board member Tim Jackson, who also served on the budget committee, said ``We did not do anything to keep the superintendent out of the loop. In fact, we encouraged the chief financial officer to dialogue with the superintendent.
``I don't know how you can be superintendent of a school district and have a deficit and a budget and not have responsibility for it.''
Although Faucette was not a member of the board's budget committee, he did serve on the audit committee, which received periodic reports about the district's finances. Faucette did not address that issue in his memo, nor did he explain why he did not remove Smith from the chief financial officer's post as he had done with Smith's predecessor last fall.
Donald F. Bennis, who joined the Virginia Beach board in April, said he did not recall Faucette saying he had lost confidence in Smith.
``I never heard Dr. Faucette say that,'' Bennis said.
Spiva said he was never aware of Faucette giving Pughsley budget oversight.
``If he did, I don't know anything about it,'' Spiva said. ``Absolutely not.''
And Anne Meek, executive assistant to the superintendent for community and media relations, said Faucette was spending a lot of time at the hospital in April because his son was ill.
``Dr. Pughsley helped to resolve the final issues in the budget cuts (at that time),'' she said. ``But in May, Dr. Faucette was again giving direction about budget oversight.''
Faucette warned Beach school officials in December 1994 that the district faced a budget shortfall if spending restrictions were not put in place.
Faucette has repeatedly said that he left Virginia Beach with assurances that spending cuts would result in a budget surplus at the end of the fiscal year.
According to the memo he wrote this week, he could not make Gwinnett officials aware of the Beach shortfall because he ``did not know about the current budget deficit, as some media reports have indicated, until two months after he left Virginia Beach.''
He tells Georgia bosses that he was ``out of the loop'' on the Beach school budget.
KEYWORDS: VIRGINIA BEACH SCHOOLS BUDGET by CNB