The controversy surrounding the Manhattan Beach Unified School District’s re-allocation of $1,033,000, which the Board of Trustees claims to have mistakenly charged to the incorrect fund, greatly exhibits the district’s need to more closely evaluate its budgetary procedures in order to ensure a more secure budget and demonstrate transparency to the public.
At the April 23 Board meeting, Deputy Superintendent Dr. Rick Bagley stated that he was responsible for mistakenly charging over $1 million of expenditures to the General Fund instead of other specific funds. In the past, the financial staff assigned expenditures to specific funds, but Bagley changed the system, allowing the Board to designate the funds. Bagley said this change was not properly implemented and led to the error.
At the meeting, many teachers and community members addressed the board’s claims, stating that the mistake was fiscally irresponsible and that they had “lost trust” in the district. Due to ongoing negotiations at the time of the error, the Manhattan Beach Unified Teachers’ Association believes it was not a mistake because the General Fund appeared smaller, providing less money available for teachers’ salaries. While the mistake is plausible given the budget’s complexity, the timing of this discovery is questionable, as MBUTA has been asking for the district to disclose financial documents for over two years. The district needs to be more forthcoming with documentation in order to prevent unnecessary controversy in the future.
Although Bagley claims the district now attaches each Board item with the designated fund to each invoice, purchase order and check, a full investigation into the budget by an outside source would be the most effective way to restore trust and ensure that there are no other accounting mistakes.
At the May 7 Board meeting, Board President Karen Komatinsky created a subcommittee to work with Bagley to better monitor the district budget. Superintendent Dr. Michael Matthews and Komatinsky suggested that it look into the reassignment of expenditures and ratify all purchases on a monthly basis in an effort to make transactions as transparent as possible. This committee is an important first step for the district to recognize problems and prevent future accounting mistakes. The Board will be able to use the information gained from this subcommittee to create better financial security within the district.
Karen Komatinsky appointed herself and Board member Christine Cronin-Hurst, who worked in finance for 22 years, to sit on the committee. MBUSD parents, teachers and community members with financial background should also be included on this subcommittee to oversee the budget as reliable third party sources.
Despite Cronin-Hurst’s proposal at the April 23 meeting to expand the financial staff, there are no plans in the budget to hire any new financial employees. Currently, the budget is checked by an auditor who checks that the budget is balanced and expenditures are taken from legally-acceptable funds. Instead of increasing the number of staff members, the auditor’s role should be expanded to ensure that money is taken from the fund approved by the Board, which would be more cost-efficient.
Teacher and community member concerns about MBUSD’s financial transparency should be met with district action. In addition to implementing suggestions from the Board subcommittee, the district should conduct an investigation to ensure all other documentation is correct and expand the role of the current auditor.
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