Get district budget in order

Charleston County School District accrued an $18 million shortfall during the 2-014-2015 school year. CFO Mike Bobby resigned this week to spare the district distracting controversy.

Popular advice to spend money first and ask forgiveness later is particularly irresponsible when it involves public money.

But if Charleston County School Board audit and finance committee member Todd Garrett is right, that’s just what has been happening in the school district.

It has to stop. Those on the staff who have acceded to such spending must be identified. Internal controls must be enforced. And if those controls are inadequate new ones must be added.

The Charleston County School Board will see an official internal audit of the district’s 2014-2015 finances next week — including an $18 million shortfall. It also has wisely ordered a more thorough forensic audit.

The board must learn how the overspending occurred if it is to manage its resources better in the future.

On Monday, the board accepted the resignation of Charleston County School District Chief Financial Officer Michael Bobby, who in a prepared statement said, “I leave with the knowledge and confidence that the district is better because of my service to it.”

He said he was resigning to spare the district public controversy.

Already it faces a $4 million shortfall for the current year, and its credit rating could suffer if its reserve fund is reduced much more to cover expenses. That means the fund is about 5 or 6 percent of the annual budget when it is supposed to be more than 8 percent.

And that bodes poorly for the internal audit. According to Mr. Garrett, the board approved a budget in June and three days later employees started exceeding it.

“If they wanted it, essentially, they got it,” he said, adding that the problem is not just in the financial office but system-wide.

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Indeed, $8.7 million of the deficit was attributed to overspending — most of it for salaries and benefits. That raises the possibility that staff members who were authorized to hire people or increase salaries for employees were agreeing to pay them more than was available in the budget. And supervisors were apparently going along with it.

The remainder of the budget shortfall was due to the district overestimating local tax revenue by $9.3 million. One big blunder was that the budget reflected a revenue increase due to the retirement of a TIF (tax increment finance plan) that had already been retired and figured into the budget.

The list of people who have to pay the price for the financial mismanagement includes taxpayers, students and teachers whose resources might be diminished and staff members whose positions might have to be eliminated.

Mr. Bobby, who served simultaneously as CFO and interim superintendent for almost a year, will receive six months’ salary and benefits — a generous package for someone under whose supervision the district acquired $18 million in unexpected debt.

Glenn Steigman, former CFO for Greenville County schools, will serve as interim CFO.

His first job should be to analyze the budget and the district’s expenses and make sure the two comport with each other.

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