Fiscal Crisis and Management Assistance Team slates review in
July
Following on the heels of a finding of “ordinary negligence” by state Fiscal Crisis and Management Assistance Team (FCMAT), consultants from the agency will once again take a close look at the Morgan Hill School District sometime in July.
This time, according to Superintendent Carolyn McKennan, the emphasis will be on the “management assistance” part of the agency.
School Board trustees agreed to request the agency take a look at the district’s budget and fiscal practices during their April 19 meeting.
“They will review the district’s current budget, with an eye for possible budget reductions and help us with making multi-year projections,” McKennan said. “We realize this is not something that’s going to change anything for us for this year, because the budget will be approved at the June 28 meeting. But the purpose is to look to the future. It’s a bit crystal-ballish, but we can look at some basic things.”
Trustee Shelle Thomas said she wants trustees and district officials to be able to look ahead and make plans when needed to avoid budget shortfalls.
“I’d like to know where we stand now where we need to go,” she said. “When I see that we’re looking at approving a budget for next year with reserves below 3 percent, that’s a red flag.”
By law, school districts must maintain a reserve fund of 3 percent of their general operating fund. Due to state budget shortfalls, the state has forgiven lower-than-mandated reserves, but the fund must be back to 3 percent by the 2005-2006 school year.
Trustee Mike Hickey said he agreed to the review because of the possibility that the consultants may find ways for the district to better utilize its resources.
“I’m hoping that with their expertise working with other districts, they might be able to assist us in finding some underutilized funding,” he said. “Possibly other districts are using other ways to come up with funds or organize things in a way that would make the district more efficient.”
Bringing FCMAT in, McKennan said, will hopefully give the district some ideas about steps that can be taken to improve the district’s practices.
“We imagine they will establish a baseline and give us ideas for keeping expenditures in line,” she said. “They will bring consultants in and review with the goal of helping us take a look at the way we’re spending money.”
Deputy Superintendent Bonnie Tognazzini, who heads the business services department for the district, said Monday that she had called the FCMAT offices to request the assistance.
“They forwarded us a draft contract, but that has not been finalized,” she said. “We agreed upon the time they would be coming, in July.”
During the May 24 meeting of the School Board, Tognazzini presented the results of the governor’s May revise of the state budget to trustees, telling them no more cuts were needed this year, and the district would end the year with a 3 percent reserve fund.
Trustees had already cut nearly $900,000 from the budget and were anticipating an additional $600,000 in cuts.
Thomas said she would like the FCMAT review and consultation to help trustees and district officials plan so that they would not be facing budget cuts on a yearly basis, as the district has this year and the past two years.
“I want us to be proactive,” she said. “If we do have to make cuts, I don’t want it to be because we’re reacting, because we have to do it to balance the budget, but I’d rather plan them, to look ahead of us and be prepared.”
One valuable thing about the FCMAT review is that the consultants who conduct the review deal with school districts all over the state, McKennan said.
“They may say, ‘How about if you try something this way, it works for this district,’” she said. “It may or may not work for us, but it is useful to look at other ideas.”
The FCMAT consultants will not focus on any one program, as some have suggested due to the fact that special education was brought up specifically during the April 19 meeting.
“They will look at all programs,” McKennan said. “The reason people sometimes single out special ed is because it is a mandated program at the state and federal level … Special ed deserves all of the assistance we can provide because of the mandates they must provide. The consultants may look at the way we deliver our services as compared to other districts and offer some recommendations.”
McKennan compared the review by FCMAT to a homeowner inviting in an interior decorator.
“There are many excellent suggestions and recommendations made, and you adopt some and not others,” she said. “Some just don’t suit your style, and you don’t accept those. We may adopt some of the recommendations from the FCMAT folks and not others. We’ll have to look at what best fits our district.”
The earlier audit on the district construction projects contained a 25-page appendix with sample policies for the board to consider adopting to help avoid such problems in the future. It concludes that neither the Education Code nor the Public Contract Code were violated, that there is no evidence of legal conflict of interest and no evidence of fraud, misappropriation of funds or other illegal practices.
In the first audit report, the district was cited for negligence, although not criminal negligence, lack of oversight and exercising poor judgment.
“While all of this adds up to poor decision making and resulted in large amounts of money spent inefficiently, FCMAT found no evidence of fraud, misappropriation of funds or other illegal practices,” the report concluded.
The district will pay for this review; FCMAT has given an estimate of $7,500.
The state paid for the initial audit because it was requested by the county Office of Education.
Marilyn Dubil covers education and law enforcement for The Times. She can be reached by e-mail at [email protected] or phoning (408) 779-4106 Ext. 202
