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Budgets hold 2 conflicting agendas for school funds

Officials aren't yet frightened about the possible $5-million gap the paper and computer plans show. Results of a review by the new finance director should be ready in two weeks.

By ROBERT KING

© St. Petersburg Times, published October 29, 2000


The word about the Hernando school district's budget does not sound good, but district leaders say it is still too early to panic.

There is a gap -- originally believed to be at $5.7-million, now nobody knows for sure -- between the budget the School Board approved in September and the working budget on the district computer.

Sara Perez, the new school budget and finance director who inherited the budgets from her predecessor, says the two spending plans should be the same. But after trying to reconcile them for more than a month, she says she has found that:

The paper budget includes $1.2-million for paying supplements to teachers who perform extra duties (such as coaching a sports team), but the computer budget has no money for such activities.

The paper budget includes $1.3-million for paying the salaries of substitutes teachers and other stand-in employees, but there is no money in the computer budget for such an expense.

The computer budget is written as if all of the job vacancies that existed in the school district on July 1 would not be filled during the next 12 months. Nevermind that there was active recruiting going on for dozens of positions -- from teachers to custodians -- that must be filled to operate the school district.

The amount of money for salaries and benefits in the computer budget was overstated by $5-million. Several items -- such as bus driver pay -- had been blessed with two times the amount of money that was shown for them in the paper budget.

And, Perez says, many smaller errors exist. At this point, after reviewing the budgets of every school and all but two district office departments, she is not sure if the pluses will outweigh the minuses.

Another two weeks of calculations are needed to determine whether the school district budget is set up to overspend by $6-million or whether everything will zero out.

"We have no idea where that figure stands right now," Perez said Friday.

Yet, for all of Perez's uncertainty, there is an abundance of calm being exhibited by Superintendent John Sanders and the five members of the School Board.

Sanders has emphasized that no money is missing from the school district's accounts. It's just that, due to some data entry mistakes, the district may be geared up to spend more money than it takes in. To limit any damage, he has frozen overtime pay and put strict limits on new purchases and hiring. And he has briefed board members individually about the matter.

His explanations were good enough that the subject of the budget discrepancies was never mentioned at two separate board meetings held Oct. 17 -- the last day the board convened.

In interviews, district leaders say they are confident Perez will iron out the kinks. And they are willing to wait patiently until Nov. 14, when she reports her findings, before hitting any panic alarms.

"To speculate now, I think, is uncalled for until we start seeing some results from what Sara comes up with," said board member John Druzbick.

Robert Wiggins, a School Board member who has an accounting background and is finance director for the county Utilities Department, spent one hour talking to Perez about the budget glitch about two weeks ago. Wiggins said he is concerned, but not worried.

"I would just say it's an input error," Wiggins said. "There may be a small gap. But I don't think it is $6-million. "I'm not panicking about it. Put it this way: I am interested in finding out the results of her research; hopefully, it will be resolved."

School Board Chairman Jim Malcolm said the superintendent briefed him on the matter several weeks ago. At this point, Malcolm says, there is nothing for the School Board to do but wait for Perez to complete her work.

"I just haven't said boo about it. I'm just waiting until it's through," Malcolm said. "What can you say? Unfortunately, there's nothing you can say."

Aside from being momentarily helpless, the source of the inner peace shared by board members and the superintendent seems to be drawn from two areas.

First, they have expressed extreme confidence in the abilities of former Budget and Finance Director Vince Benedict, who drew up the 2000-01 budget before resigning to focus on his battle with cancer. Benedict has been credited with helping to improve the district's financial picture and for reducing the number of complaints from auditors who have reviewed the books.

Secondly, they believe budget discrepancies are largely a product of different styles of doing business that exist between Perez and Benedict. Perez prides herself in being detail-oriented. Benedict fashions himself as a big-picture sort of guy.

Perez, who recently announced that she will leave her job by the end of the year because of family commitments in California, has not given up hope that the school district's books can be reconciled without resorting to deep mid-year budget cuts. But she says flaws in the current budget are indisputable. She does not understand how the budget can be accurate if the numbers that make up its parts are off base.

"I have always felt like I should be able to account for every penny," Perez said. "I just don't know how you can do that."

In Citrus County, where Perez worked before coming to Hernando, the school district managed to stockpile an $8-million cash balance over two years, sparking some criticism that she was overly conservative. A candidate for school superintendent -- the superintendent is elected in Citrus -- even said Perez told her the district had been headed for bankruptcy, something Perez denies.

Perez said the Citrus School Board had set a goal to raise its cash reserve -- and that the cash reserve was built through sound financial practices.

Benedict, for his part, is confident that the budget he left behind will carry the school district safely through the year. He said it was not uncommon during his tenure for the paper and computer budgets to be temporarily mismatched.

Still, it has not escaped some board members that this glitch popped up in a year when the budget-writing process was put on fast forward in an effort to finish it quickly so Benedict could turn his focus to his health.

Wiggins said this year has been a "tough time" for Benedict. And Druzbick, who has often praised Benedict's efforts, said: "If there are mistakes, that's possibly where they could have been made."

Benedict says it is the nature of the budget process for things to come more clearly into focus as the year moves along. That is why each year he has submitted budget amendments to tweak items that are out of line.

And he has made it a practice to pad the budget with money that could cover unexpected costs that inevitably crop up each year.

"I look at the macro, and she (Perez) likes to be involved in the micro," Benedict said. "You have to know the history of Hernando County. It took me the first eight months to learn what had gone before."

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