Monday, November 16, 2015

Charleston school district CFO Michael Bobby steps down

School board chair says no district funds missing following $18 million budgetary shortfall

Posted by Dustin Waters on Mon, Nov 16, 2015 at 12:29 PM

click to enlarge Michael Bobby - FILE PHOTO
  • File photo
  • Michael Bobby
Michael Bobby, chief financial officer for Charleston County School District, announced his resignation Monday. Bobby’s decision to leave comes weeks after the revelation of an $18 million deficit in the district’s budget. Bobby has been with CCSD since 2007.

According to a statement released by the district, Deputy of Capital Projects Jeff Borowy will lead all district activities at CCSD’s Bridgeview office with the exception of finance. Glenn Stiegman, former CFO for Greenville County schools, has been appointed as the interim CFO in Bobby’s absence. Stiegman was brought in to conduct an analysis of CCSD’s budget following the discovery of the $18 million shortfall.

Bobby was asked to serve as interim superintendent in October 2014. The board hired CCSD’s current superintendent, Gerrita Postlewait, in July. School board member Rev. Chris Collins says that Bobby was tasked with too many responsibilities during his time with the district. 

“They simple chose to put Mr. Bobby in charge of academics and the finances, and that’s just way too much. There’s no way a superintendent can run a district financially. There’s no way,” says Collins. “He was swamped. ... I told Dr. Postlewait that’s too much responsibility for any one person. All that you see is not his fault. It’s the reliance on one person for so many things.”

Collins added that a lack of oversight in district finances also contributed to the current budgetary troubles, saying, “Right now, we’ve got several years of problems that have piled up on us.”

After Bobby’s announcement, CCSD Board Chairman Cindy Bohn Coats released the following statement on the current financial state of the district:

“It is important to point out that, to our knowledge, no school district funds are missing. The problem we face is that the district has seriously dipped into its savings account for recurring expenses. This practice cannot continue.

“The district established a growing reserve fund (savings account) for several years prior to 2012. Since then, the savings account has steadily declined. Keeping the reserve fund at specified levels is essential in being able to sell bonds to support the school district construction program. In addition, in order to make payroll and pay the district’s bills, short-term borrowing is necessary each year before tax revenues are collected and distributed to the district. Lenders look at a district’s reserve fund to determine the district’s ability to repay these short-term loans.”

Coats then outlines the factors she says led to the district’s current financial state. First on the list is the “persistent history of inadequate financial updating and reporting to the board.”

Coats says the district has used funds from its savings account in order to avoid increasing taxes or cutting funds for the past five years. She blames a lack of “IT systems and IT systems management” for the difficulty in determining where the district stood financially on a month-to-month basis. Coats also says there was a lack of accountability for staying within budgets and “expenditures were not monitored and reported on a timely and consistent basis.”

“In some instances,” Coats says, “the district entrusted program managers who may not have been adequately trained for their level of responsibility.”

According to Collins, part of the problem is school board members aren’t provided a complete picture of the district’s budget when it comes time to vote.

“We need the entire budget. We need it about two or three months in advance to go through it to make sure that it’s right. We’ve never done that before,” he says. “We only get a little piece of the budget at the end to cut down a few things that we may or may not need or cut corners here and there. We never see the whole picture of the budget.”

The district’s internal investigation of the budgetary crisis is still underway.

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