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Legislative audit committee criticizes Pinellas schools' fiscal controls

In an unusual move, state lawmakers took a long, hard look this week at a March 2009 state audit that found problems with the Pinellas school district's financial controls.

The Joint Legislative Auditing Committee, which met Monday, rarely scrutinizes a school district's audit. But with the Pinellas review, the committee staff felt the sheer number of red flags — and the fact that some of them were raised in earlier audits — was enough to bring it to lawmakers' attention.

The most egregious audits are reviewed either "with the chairman of the committee behind closed doors or they take it to the full committee for television time," said committee member and state Sen. Stephen Wise, R-Jacksonville.

Monday's meeting was broadcast live on the Florida Channel, which covers the Legislature. Superintendent Julie Janssen and three other top district officials travelled to Tallahassee to attend.

The Florida auditor general report listed 25 findings, including one "material weakness" —the most severe classification — and two "significant deficiencies." The former concerned the district's internal controls over its investment program; the latter to financial reporting and bank account reconciliations.

The audit covered the 2007-08 school year.

"I hate to say this, but those weren't under my watch," Janssen, who became superintendent in September 2008, told the committee. "We have been very aggressive in addressing every single one of those items."

But some changes recommended by auditors require more staff, and the district's chief budget officer, Lanse Johansen, said Tuesday "the chance of getting this at the time of cutting the budget aren't very good."

Lawmakers zeroed in on three areas.

In one finding, the audit noted the district had transferred more than $6 million in work force development money to an unrestricted account in the general fund, and did so contrary to guidance from state education officials and despite a recommendation in a previous audit to stop.

"Their response was their general counsel said it was okay," said Wise. "It's not okay."

District officials say they're not doing that anymore.

Auditors also recommended the district keep better tabs on the personal use of district-issued cell phones. But Wise, who chairs the Senate's PreK-12 appropriations committee, was more concerned about the sheer number of cell phones (925) and the cost for their use ($427,311).

The issue isn't exclusive to Pinellas, but Wise used the district to raise a larger concern he said may be addressed during the legislative session that begins March 2.

"We get this a lot (from schools): 'We don't have any money for toilet paper, you have to bring your own,' " he said. " 'But we're spending $400,000 on cell phones.' "

District officials said they're evaluating the necessity of the cell phones in use.

Lawmakers also had questions about one of the more technical findings in the audit, internal controls over the district's investment program.

District officials said they've made a number of changes in that area. They've done additional training for employees who are designated as backups for the district's cash and investments manager. And they hired a consultant to review the district's process for reconciling accounts. Other changes are being pursued.

"We've got a saying up in the Panhandle: 'You've got a weedy row,' " Rep. Greg Evers, R-Baker, the committee chairman, told Pinellas school officials. "Get the weeds out. Or it will choke the cotton."

Evers provided his own translation: "There's a lot of room for improvement."

Despite continued repercussions from the audit, Johansen said this week's legislative review is "really not much of a story."

He emphasized that the district is getting a bigger return on its investments than other districts that rely more heavily on investment funds managed by the State Board of Administration.

"When the auditors write us up for all these deficiencies, they lose sight of the fact that we're making more money," he said.

The state's next regular audit of Pinellas is scheduled for release in 2012.

Times staff writer Lee Logan contributed to this report.

Legislative audit committee criticizes Pinellas schools' fiscal controls 01/12/10 [Last modified: Tuesday, January 12, 2010 11:52pm]
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