MILLIONS MISMANAGED
State auditors slam Florida School for the Deaf and the Blind for unaccounted funds, sloppy accounting, failure to explain fully
RICHARD PRIOR
richard.prior@staugustine.com
Publication Date: 05/06/07
The Florida School for the Deaf and the Blind has mismanaged millions of dollars, much of which remains unaccounted for, according to four consecutive reports by the state Auditor General's Office.
And that's the "good" report.
The "real" report is worse, said an investigator at the Auditor General's Office, who did not want his name used for fear of losing his job.
"Political influence was brought to bear so the (2006) report didn't say what it needed to say," the investigator said. "There was a lot more in the report itself, but it got pulled."
The audits from 2002 to 2006 are riddled with complaints about poor accounting procedures, mismanagement of funds, undocumented expenses as well as complaints that the school's president, Elmer Dillingham, did not answer their questions fully.
Dillingham declined comment for this article, although he gave a prepared statement saying that he has responded to the auditor general "through appropriate channels."
"I have no comment beyond that," he wrote in an e-mail.
Mary Jane Dillon, chairwoman of the school's Board of Trustees, said she would respond later.
The auditors' frustration was clear throughout their reports, as this example shows:
In 2002, the school estimated maintenance costs for a garage at $42,700. The auditors' 2003 report said that was "apparently excessive." In 2004, that cost rose to $54,100.
In their 2006 audit, auditors wanted to know why the cost was so high, especially for a building that has 861 square feet, or is roughly 30 feet by 28‡ feet.
That's not the only small building that caught the auditors' attention.
In 2000, the school built a 344-square-foot canoe storage building with a metal roof. Six years later the school asked for $5,000 to pay for a shingle roof.
Also, the school estimates that it will need to spend $42,700 in maintenance for the Ed Parry Press Box, which was built in 1997. At 71 square feet, maintenance costs would be $601 a square foot.
To put this in perspective, a 3,026-square-foot Marsh Creek home with Intracoastal views and a pool is on the market for $1,250,000, or $413 a square foot.
"In response to our questions regarding the reasonableness or necessity of the above-mentioned maintenance work, the School did not provide an explanation," the auditors wrote.
Two recurring themes run through the auditors' reports -- their concern about the school's management of funds and the administration's failure to give complete answers to the auditors' questions.
These key findings from the auditors underscore those themes:
Where did $5 million go?
In 2005, FSDB did a study to support 10 "major" renovations on campus buildings. It estimated the costs would be $31.6 million.
Then, a year later, the actual request came to $42.7 million.
Why the $11.1 million difference?
The state auditors asked that question and, according to the report, did not get an "adequate" answer.
The school's president said various costs and fees came to $6,050,000. He didn't account for the other $5 million.
"The school has not provided us with a specific accounting for the $11.1 million difference," the auditors wrote."As of April 23, the Auditor General's Office still didn't know what happened to the remaining $5 million.
Why extra maintenance costs for remodeled buildings?
Koger Hall is scheduled for a $3.4 million remodel this year and next.
So why did the school also ask for $131,000 in maintenance for the same time period?
That's a question auditors want answered, as well as why four other major renovation projects also have major maintenance charges.
Here's the list, in addition to Koger Hall, that the auditors highlighted:
Walker Hall Annex: Remodeled in 2003 for $814,000. That work included interior painting and a new heating, ventilation and air conditioning system. The school plans maintenance of $263,116 through 2009-10, as well as $31,000 for HVAC repairs and replacement and $18,000 for interior painting.
Kirk Memorial was scheduled for a $4 million remodeling project in 2004-05. The school now wants $101,800 for maintenance through 2008-09, including $49,800 for interior maintenance, including painting.
Rhyne Hall is scheduled for a $3.8 million remodel in 2007-08. Auditors want to know why the school needs $148,000 in maintenance through 2006-07.
The Special Needs Complex is scheduled for a $5 million remodel in 2008-09, so the auditors asked why is it also scheduled for maintenance totaling $495,500 through 2009-10?
The school's explanation for the additional costs cited work to be done at the other 10 buildings in the package. It did not address the work at the five buildings the auditor questioned.
"The School did not provide any building-by-building specifics," the auditors wrote.
$312,000 budgeted, $1,460 spent; Where's the rest?
In April 2006, the auditors wrote that the school's facilities plan for 2004 included calling for $312,000 for maintenance of three buildings.
So why did the school only spend $1,460 of that money?
FSDB replied that the school tries to anticipate what will be needed over a 20-year cycle and that "actual maintenance expenditures were made when repairs were needed," according to the report.
But, the auditor continued, "The school did not provide evidence that facilities were assessed for deferred maintenance or that deferred maintenance was tracked and monitored.
"Consequently, it is not evident that the funding provided for specified maintenance has been spent by the School for the purposes or tasks listed in the plan."
$63.5 million requested; no explanation given
The school's plan for 2004-10 called for $63.5 million for capital projects, maintenance and related items, according to the April 2005 audit.
FSBD did not show, however, that the condition of the buildings had been given a "systematic and objective assessment."
The auditors asked why the school did not provide documents to show that the buildings on the schedule "lacked functionality or were in need of renovation."
Dillingham said in his response that, working with staff from the state Department of Education "has been of most help" in compiling revised plans. He said the school also was going to an independent agency to review major capital projects.
Staffing outstrips school enrollment
The school received $728,878 to fund 20 new positions, 16 of which were because the school forecasted a "significant increase in enrollment" that didn't happen, according to the April 2005 audit.
FSBD projected an increase of 102 students -- to 845 -- for the 2003-04 school year. The actual enrollment was 729 students, an increase of 11.
The school kept the extra money and incorporated it into the base level on which future budgets are built, wrote the auditors.
The auditors wondered why the projected enrollment was so optimistic since, "Our review disclosed that the School has experienced a 1.79 percent average annual increase in enrollment over the last 10 years."
According to the report, Dillingham later told the auditor that the additional positions were for student increases that had already happened, not on a projection for one year.
"However," the auditor wrote, "although requested, we were not provided with documentation of the particular time period and student enrollment figures used to justify the additional positions requested."
One-time expenses entered as every-year expenses
The school received $5,000 in one-time funds for each of the 106 positions that had been approved on campus since the 1994-95 school year. That money -- $530,000 in all -- is for expenses like desks, chairs, bookcases and telephones.
The auditors criticized the school for taking these one-time expenses and putting them in the base line for annual budgets. The "cumulative effect" of doing that "exceeds $4 million," the auditor wrote in 2006.
The auditors said the school did the same thing with money for new buses, replacement equipment and other vehicles. In the 1994-95 budget year, the school put in one-time expenses of $466,700 for buses and related expenses.
But then the school added that one-time expense to its annual budget, resulting in a cumulative effect that "will exceed $5 million," according to the audit.
"The point of our finding," the auditor wrote, "is that the funding for these nonrecurring (one-time) items was not deducted by the School from its subsequent year's budget request and inappropriately became part of the School's continuing funding base."
Dillingham wrote to the auditors in 2006 that for 10 years there had been no category in the budget for the school to enter one-time items. He said he understood that the Governor's Office of Policy and Budget was responsible for handling those entries.
"We're not saying this money was misspent," said Joseph L. Williams, audit manager for the Auditor General's Office in Tallahassee. "We're saying it was improperly put in the base.
"The school should not get money this way," he added. "It should have been appropriated."
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