redundant eye-scalding Florida Keys blackboard jungle financial SNAFUS and hurricane evacuation schecule (aka let’s pave over more of the Keys) propagandaSaturday, March 9th, 2013
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There is a Key West “Silver Lining” – aka channel rape, and quality of life economic stimulus package suggestion post today at goodmorningkeywest.com.
eye-scalding truth that the Asteroid Belt’s school district should be taken over by the Florida Board of Education, which intervention I was the only candidate in last year’s school board races to advocate.
State audit of schools analyzed
Retired banker: Auditor General’s report reflects ‘system in shambles’
BY TERRY SCHMIDA Citizen Staff
What a mess.
That’s the unofficial verdict of Nancy S. Beckwith, a retired commercial and government banker, on the Florida Auditor General’s recently released preliminary 2012 audit of the Monroe County School District.
The audit lists 18 “findings” — five involving funding from the federal government — that require district action. Six of those findings have been cited for at least three years.
Beckwith said the report “reflects a system in shambles,” leading her to “wonder how this public entity is allowed to continue operations on taxpayer dollars without state intervention.”
District 3 School Board member Ed Davidson feels much the same way.
What puzzles me is, Ed religiously attended School Board meetings for over 10 years, before he ran for the School Board last year. After the School Board created the volunteer Audit & Fiance Committee, to watch dog the School District and report to and advise the School Board, Ed religiously attended Audit & Finance Committee meetings. Yet he only now feels state intervention is necessary? Attending a few School Board meeting and a few Audit & Finance Committee meetings in the fall of 2010, and a few more meetings in early 2011, convinced me that state takeover of the School District was necessary.
Outgoing Director of Finance and Performance Ken Gentile has stopped returning calls from The Citizen requesting comment.
On March 1, Superintendent of Schools Mark Porter notified Gentile, and his Director of Operations Michael Kinneer — who used to be the chief financial officer — that their contracts would not be renewed.
Many of the findings could affect future borrowing costs and finances.
The district’s Audit and Finance Committee is scheduled to tackle some of the issues when it meets at 9:30 a.m. Monday in Marathon. The School Board will discuss the panel’s recommendations at its meeting Tuesday. Porter must explain the district’s side of the story in a reply to the Auditor General’s Office by March 19.
Here are the first seven of the report’s findings:
• The only “Significant Deficiency” in the report states that “financial reporting procedures could be improved to ensure that transactions and note disclosures are properly reported.”
Specifically, Beckwith said, “The district overstated instruction and depreciation/amortization expense by $4.38 million and $2.72 million, respectively, and understated depreciable capital assets and facilities acquisitions and construction expenses by $5.27 million and $1.83 million respectively.”
She called it “blatant misreporting.”
That, and/or blatant not having a clue incompetence.
Beckwith also noted that basic accounting principles require explanatory notes on financial statements, in particular on the credit risk of district investments representing 5 percent or more of total investments.
This was not done, she said.
Apparently, standard operating procedure for this school district.
“This investment note disclosure … was omitted by the district on a $2,223,000 investment in Fannie Mae Subordinated Benchmark Notes, which at the time of the audit, represented approximately 29 percent of the investments … .”
Davidson added: “We failed to properly account for $7.1 million in the proper expense categories. And we were cited for similar mistakes for the last four years in a row, which doesn’t sound like improvement to me.”
• Miscalculations may mean the district’s budget actually represents less than 3 percent of its general fund. Under 3 percent means the state must be notified and could lead to state action.
“Since the district’s General Fund balance, as of June 30, 2013, was not properly calculated … the total was overstated to represent 5.5 percent of General Fund revenues,” Beckwith said.
It’s a serious matter, Davidson said.
“Every business in the country is required to include in their financial statement all the money they know that they owe to anybody,” he said. “The School District, however, didn’t do that. “The auditor points out that the district has not reported that we are short $1,901,332 in [workers'] compensation reserves, or $900,000 in health insurance reserves, nor the $652,260.42 in possible repayments for questionably spent federal funds. If we subtract those figures from our alleged fund balance, we’re practically broke.”
Gosh, Ed, you knew that last year, and the year before, and the year before, etc. Are you now going to call for a state takeover of our school district?
• Minutes of meetings were not provided to the public in a timely manner, contrary to the Sunshine Law.
“During fiscal 2011-12, the board held 26 public meetings for which minutes were required … . The minutes for 18 meetings were not approved until an average of 74 days after the next regular meeting.” After the School Board approved the minutes, Beckwith noted, it took an average of 141 days for them to be posted on the district’s website.
• The district was 267 days late paying the $2,117,647 annual payment on its $36 million bond — basically a mortgage — on the Horace O’Bryant Middle School, which is still under construction. The interest on the loan is partially subsidized by the federal government.
Beckwith called this finding “one huge red flag.”
Davidson has called it “simply stunning.”
Actually, it was business as usual, Ed.
Gentile has said it was an oversight due to the district receiving “an incorrect invoice” from the bank, but Beckwith didn’t buy it.
Who would buy it, but maybe 6-term school board member, Andy Griffiths, on whose many watches all of this cumulation kept cumulating, even as Andy kept crowing publicly about what a great school district this is. Well, your folks of the Keys, you reelected him by a landslide, I suppose you wanted more of the same.
“Does one need to ask how the School District is not aware of their obligation on a $36 million bond issue?” she asked.
Davidson thinks this finding is the most important one.
Hell, Ed, all of the findings are important, but for me, the most important finding is the reserve fund balance continues to be way understated, on purpose, and there is not way you and the other members of the School Board didn’t know that.
“How is that not the most egregious finding?” he said. “It’s basically a mortgage payment. If a homeowner has a payment to make, would they wait for the bank to realize its mistake and contact them?”
• There were no restrictions listed on how $4.96 million in capital project funds could be spent, the audit reported.
This is an “accounting 101″ issue, Beckwith said.
“There are varying levels of legal restrictions on how fund balance money can be spent,” Davidson stated. “And if those are not properly identified, we don’t know how much ready cash we have on hand for emergencies.”
That’s been so a long time.
Beckwith added: “The recommendation on this accounting error is so basic to accounting procedures, one must wonder who is ‘handling the accounting process’ for the School District.”
• The district’s Workers Compensation/General Liability Internal Service Fund had a negative balance of $1.9 million as of June 30, 2012.
Here, the audit points out that unless something changes, the fund will not be able to meet its obligations.
Beckwith noted that steps have been taken to correct the problem. “The district increased the Workers’ Compensation board contribution rate from 2.6 percent to 4.7 percent of salaries for the current fiscal year (2012-13); however, this increase will still leave a deficit of $266,758,” she noted.
This issue has been cited three times in the past four years.
• Accounting for the Adult Education department is still in tatters, the audit indicates.
Davidson has called Adult Education classes “ground zero” of the Monique Acevedo embezzlement scandal. She headed the department when her husband was schools superintendent and is serving an eight-year prison sentence for stealing $413,000 from the school system.
The audit reviewed a portion of the district’s reported 138,334 adult education hours for fiscal year 2011-12.
“Our review of 1,113 hours reported to the FDOE (Florida Department of Education) for 10 students enrolled in 33 classes disclosed that the district allowed students to enroll in different classes that were scheduled to meet at the same time, resulting in 369 hours over-reported for classes unattended by six students.”
Davidson said the reporting of Adult Education data must be revamped.
“Because our method of reporting Adult Education costs and results was as puzzling and confusing to the auditors as it is to me … I think … we’re going to have to pay some of that money back,” Davidson said.
“We also need to fundamentally redesign the way we report … and Superintendent Porter is working on this, thankfully.”
It was the second year this problem was listed.
The rest of the findings will be published in The Citizen’s Sunday edition.
Ed, do you truly think this school district can be straightened out without the state taking it over? That’s not an entirely sincere question.
Speaking of insincerity, in the Keynoter today, 100 percent eye-scalding truth that the hurricane evacuation schedule is about allowing more development under the guise of saving lives:
Florida Cabinet OKs 3,550 new building permits
By KEVIN WADLOW
Posted – Saturday, March 09, 2013 06:00 AM EST
Citing the “delicate balance to be had in the Keys between public safety and property rights,” Gov. Rick Scott and the Florida Cabinet on Thursday voted to allow 3,550 new residential units to be built in Monroe over the next decade.
Property rights always have trumped public safety on this issue in the Keys.
Significant progress in constructing state-mandated central sewer systems and a newly approved hurricane-evacuation plan were cited as reasons for endorsing the updated Area of Critical State Concern plan for the Florida Keys, passed unanimously in Tallahassee.
The state, county and local municipalities “all reached agreement on input variables and assumptions” for the new hurricane plan, meaning “3,550 additional residential units could be built while maintaining the 24-hour evacuation time,” said Jesse Panuccio, executive director of the state Department of Economic Opportunity that oversees growth management.
Shades of 1984 double speak. If the government says something is so today, which the government said wasn’t so yesterday, it’s so today.
The building-permit allocations will be divided among the unincorporated county, Marathon and Islamorada. Key West and Key Colony Beach, both mostly built out, have their own allocations.
While accepting the future building permits, Monroe County Mayor George Neugent, Marathon Mayor Mike Cinque and Islamorada Mayor Ken Philipson all urged the Cabinet to revive the dormant Florida Forever land-acquisition program so vacant Keys lots can be purchased to limit future growth that may slow an evacuation.
If Tallahassee restricts development in the Keys, then Tallahassee should pay Keys property owners for the resulting loss in value of their real estate.
“Over the years, I believe the residents of the Florida Keys have become good caretakers of the fragile ecosystem we live within,” Cinque told the Cabinet. “We’ve done a lot to protect the environment for future generations but a lot more needs to be done.”
Neugent said even the allocation of 3,550 new units means “both the state and county still face [property takings] challenges over 8,000 vacant privately held parcels.”
Shaw Stiller, representing three local environmental groups, was the only person to speak against the permit allocation.
He asked that the 3,550 units be stretched from 10 years to 20 based on a lack of funding for land purchases and uncertain reliability of the evacuation times. The evacuation plan “was based on the most generous assumptions available,” said Stiller, representing Last Stand, the Florida Keys Citizens Coalition and the Florida Keys Environmental Fund.
“You’ve all been there,” he said. “There’s only one way in and one way out.”
Scott said the evacuation model is the result of “hard work” and extensive meetings involving experts, citizens and elected officials who considered everything from population to weather forecasting and traffic flow.
Yep, it took a lot of hard work to cook those numbers and get the result the termite people wanted to get.
The governor “applauded” the effort that “provides appropriate growth while maximizing safety for residents and visitors alike in the Keys.”
What about maximizing the safety for the Keys themselves, that would be Mother Nature, who doesn’t seem to have any say-so. Note, I said doesn’t seem. She has ways of dealing with this masquerade, which the governor and the rest of the termite people really won’t like. Nor, I don’t imagine, will any member of Last Stand like it, either. Nor anyone else living in the Keys.