Duval’s school board on Tuesday put off hiring an outside firm to do a financial review of last year’s spending until after the board’s own auditor and district staff do their own analysis of spending.
Board chairwoman Paula Wright asked for and received an informal consensus from the board to first let board auditor Michelle Begley perform an analysis of last year’s finances, specifically looking at which programs and initiatives the district funded last year beyond their budgeted allocations.
In addition to comparing expenditures to budget projections, the analysis also is supposed to point out ways the district can avoid the same over-spending issues in its finances this year.
“Some of these questions need to have answers,” Wright said, adding she believes there was no misuse or mismanagement of any money, but she wants to be sure each initiative the board approves has a corresponding line item in the budget, showing how it will be funded.
Wright reiterated she still wants to hire an outside auditor to do an independent financial review, but she hopes Begley’s analysis can help narrow the scope for that review and possibly lower its cost.
Ashley Smith Juarez, the board vice chairwoman who first said the district may have spent $21 million more than expected last year, said she is reluctant to spend a couple hundred thousand dollars now on an outside auditor because the district is cutting programs for students to balance its budget. She said district staff and Begley can probably do the job.
If money’s the main concern, the board should get the city’s auditor general to examine Duval’s spending, board member Scott Shine said. He said that wouldn’t cost the district any money.
But Wright said she would prefer a truly independent entity doing the “deep dive” into Duval’s finances, rather than an entity or individual with political links.
It is unclear how long it will take Begley to do her analysis. Smith Juarez estimated as much as eight weeks, but Wright said she doesn’t want to rush it.
“We can’t say we want a thorough job and then rush it,” Wright said.
Duval is under some pressure to conduct an independent audit of last year’s spending.
Three state representatives, including former board members Jason Fischer and Kimberly Daniels, have asked the Joint Legislative Auditing Committee to conduct an audit of Duval’s books.
However, state Sen. Debbie Mayfield, who chairs the committee, said the state auditor general recently completed an operational audit of the district in March. Mayfield said she prefers to wait for the outcome of the district’s “forensic audit.”
Wright said she is not seeking a forensic audit because those typically are done to gather evidence in legal cases. She said she prefers to call it a financial review.
District officials also say Duval did not overspend all of its $1.7 billion budget; it spent $21 million more than had been expected from its operating budget, causing the district to use some of its reserve funds. Duval keeps five percent of its revenue in reserve, above state requirements of three percent.
What is unknown is why the board and outgoing Superintendent Nikolai Vitti in May were expecting $11.9 million to $15 million in “roll forward” money, which is money left over after last year’s bills are paid. Instead, by July, there was no left over money and Duval had used some of its reserves to close out fiscal 2016-17’s books.
Duval’s interim Superintendent Patricia Willis said the district is taking measures to make sure this doesn’t happen again. For instance, departments are now required to keep their budget documents and updates on the district’s centralized, electronic budget preparation system, “so we can look at budgets in real time,” she said.
Fischer said these changes and plans for a review are not enough, and are not what the public expects. He said it looks as though the district will be doing a “watered down” review, which won’t be independent.
“They decided they’re not going to do an audit. They even rejected the use of the word audit,” Fischer said. “The chairman (Wright) told the public that they took a vote to do a forensic audit when that never happened. I’m having a hard time trusting what she says at this point.”
Denise Smith Amos: 904-359-4083