THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Sunday, October 15, 1995 TAG: 9510160194
SECTION: LOCAL PAGE: B1 EDITION: FINAL
SOURCE: BY ALETA PAYNE, STAFF WRITER
DATELINE: VIRGINIA BEACH LENGTH: Long : 157 lines
The school superintendent's office overspent its 1993-94 budget by almost $400,000 and would have exceeded its 1994-95 allotment by $50,000 if not for a transfer of funds, records show.
During this time, the school division's finances spun out of control and problems from one year merged into the next, culminating in the worst fiscal crisis in the system's history - a $7.4 million budget shortfall that became public in August.
Former Superintendent Sidney L. Faucette has said, from his new job in Georgia, that he relied on information from his staff about the big-picture condition of the division's finances.
But by internal practice, Faucette had direct control, and ultimate responsibility, for the one sheet of the 400-page budget document that included his salary, the deputy superintendent's salary and the costs of supporting their work.
For the 1993-94 school year, the executive portion of the budget ate up $1,014,969, although it was allotted $620,177. For the 1994-95 fiscal year, the office originally was given $650,109, ended up getting $712,082 and spent $704,514.
Faucette responded in writing last week to a list of questions and supporting documents faxed to his office in Gwinnett County, where he has been superintendent since July.
Asked whether he realized his unit's budget was overspent, Faucette wrote: ``The information that you sent me does not provide adequate information on which to respond to a seemingly uncomplicated question, when in fact, it is a complex question concerning the nature of lump-sum funding, fiscal dependency, monthly review of accounts by the School Board, action of the Board to adjust the operating budget on a periodic basis, and the requirement that the finance department not pay anything unless sufficient funds were available.
``As a result, the Chief Financial Officer and the Director of Budget Development are the only two people who can give you insight into the question.''
Others see it more simply.
Individual administrators ``absolutely'' are responsible for the spending done within and by their offices, according to Anne Meek, executive assistant to the superintendent for community and media relations, and herself a department head.
School Board member Tim Jackson said he ``definitely'' would consider Faucette responsible for keeping the executive services budget in line.
At the board's last meeting, Jackson requested a list of administrators who blew their individual budgets.
``He was in charge of the school system,'' Jackson said. ``He was the superintendent. He set the example for everyone else to follow.''
The division carried $2.8 million in purchase orders from 1993-94 to 1994-95 because it ran short of money. Dozens of overspent line items from departments and offices throughout the division likely contributed to the problem, which has haunted the division in its ongoing fiscal crisis.
Among the expenditures drawn on the executive accounts for 1993-94 are:
Almost $72,000 in printing and binding expenses, although no money was allocated to cover them.
More than $8,000 in dues and memberships, although, again, no money was budgeted to pay for them.
$33,600 for professional improvement, almost $12,000 more than was budgeted.
At the same time, Faucette's expenses for meals, travel and the like approached $13,000, the most he spent in his four years with the division.
Those expenses included $417 for a suite at the Omni hotel in Norfolk, which was used to meet with local PTA members during the state's PTA convention there; a tab for $210 for meals at the tony Trellis restaurant in Williamsburg; and costs in excess of $2,500 associated with trips to Boston, San Francisco, Jacksonville, Chicago and Rancho Mirage, Calif., over a period of 10 months.
It appears that all of the '93-94 expenses were business-related. Indeed, Faucette took care to reimburse the division for any bills that could be considered personal, including sums as small as 83 cents for a phone call placed from a Chicago hotel.
Asked about expenses for which he sought reimbursement as well as those charged to a credit card issued in his name but paid for by the division, Faucette responded:
``If you carefully scrutinize the credit card payments and requests for reimbursement, I believe you will find that increased expenditures were not the result of superintendent's expenses. Delineation of expenditures by those for superintendent, the deputy superintendent, the School Board and other staff may give you some insight into whose expenditures did increase.''
While Faucette's expenses sometimes include meals and such for others in the division, charges specific to School Board members and staff were eliminated from The Virginian-Pilot's calculations whenever they could be identified by name or budget code.
``Before I left Virginia Beach,'' he wrote, ``I had a member of my staff carefully analyze the credit card account from its time of establishment to my leaving. The finding was that all expenses were appropriate and properly accounted for.
``But . . . knowing the nature of my four years there, I also carefully studied the credit card account myself to be absolutely certain that expenditures met strict standards of appropriateness for all of my expenses.''
In the 1994-95 fiscal year, spending division-wide slowed under orders from the superintendent and Chief Financial Officer Mordecai L. Smith, now on administrative leave, as the financial crisis became apparent.
Faucette's credit card charges and other incidental expenses dropped to $8,366.46 for that year. The bulk of unbudgeted expenditures in the executive offices appeared to have been a lump sum payment to him for unused sick leave. In a series of memos, he sought to curb spending, forcefully telling top administrators that the division was close to fiscal disaster.
A December 1994 memo from Faucette to school district leaders ordered a plan of delayed spending that limited additional expenditures to essential supplies, equipment and personnel.
``Common sense restraint will position us to provide quality services and maintain financial security,'' Faucette wrote.
Late in the year, when people throughout the district were counting pencils and measuring gas in the tanks of buses, the superintendent acted against his own spending directives by authorizing two events to honor school volunteers.
``How do I explain travel and entertainment expenses after stringent funding restrictions were in place? Simply put, the school division still had obligations to meet,'' Faucette wrote The Virginian-Pilot. ``You will find that my travel and entertainment expenses became almost nonexistent after stringent spending restrictions were put in place in the late winter/early spring.''
In March, another memo went out, this one from Faucette and James L. Pughsley, then the division's deputy superintendent who now serves as interim superintendent. That memo read, in part, ``After March 31, 1995, funds are to be used for this year's students and only essential purchases are to be made. Each department head will be held accountable for compliance with the above. Any exceptions to the purchase freeze must receive prior approval of the Superintendent or Deputy Superintendent.''
In a follow-up memo, dated April 7, to Pughsley and other senior administrators, Faucette wrote, ``As of today, purchases or commitments of school funds, except for essential operations, are not to be made by anyone. `Essential' means the procurement of only those services consequential to the safety and security of buildings and equipment required to provide direct services to students.''
``All purchase orders for nonessential items are to be canceled immediately.''
On April 27, a dinner and reception was held for the PTA Volunteers of the Year. The event, held at the Clarion Hotel, cost less than the previous year's because the hotel management agreed to absorb part of the cost. The bill was $2,888.81. On May 4, a catered reception was held for the division's Adopt-A-School partners, featuring assorted desserts, vegetable pate and crackers, and other finger foods. The cost: $2,316.11.
Both events were charged to Faucette's credit card, although they were paid for out of the public information budget. Meek, the special assistant for community and media relations, said that canceling the events was discussed but that Faucette decided to proceed with them.
``The value of volunteer time and benefits far exceeds the costs of `economized,' or for that matter `lavish,' recognition dinners or receptions for volunteers. I cannot imagine offending or postponing recognition for these valuable partners,'' Faucette responded to the newspaper.
``If I had any idea that such costs would ever be called into question by anyone, I would have paid for the events through donations.'' ILLUSTRATION: Color photo
KEYWORDS: VIRGINIA BEACH SCHOOLS BUDGET by CNB