Members of the Lee County School Board debated findings Tuesday from the Florida general auditor that state the district was wrong in using $3.6 million from its capital account to purchase equipment for its computer overhaul.
The district contracted with Oracle-Peoplesoft to revamp its computer systems for $19 million. According to the state audit, it used $3.6 million from the capital account to purchase software.
Florida statutes do not specifically define computer software under capital expenditures, and the state auditor wants those funds put back.
The general auditor declared that the district has to replenish the $3.6 million from its operating account, which is used for employee salaries and costs in the classrooms.
Already expecting a maximum loss of $70 million next year, an additional $3.6 million would only further cripple district operations.
Vice Chairman Steven Teuber said Tuesday afternoon that the district is not in danger of losing the $3.6 million.
“The Department of Education made the ruling and we think they are wrong,” he said. “The applicability or probability, if I was a betting man, is that it’s not coming. I have good confidence in our legislator.”
Teuber is expecting the district to receive relief from a bill, introduced by Sen. Garrett Richter, R-Naples, that changes the definitions of capital expenses. The intent of the legislation is to allow districts to buy software as a capital expenditure.
If the legislation is not effective in allowing computer software to be labeled as capital expenses, Teuber said the school district could file a lawsuit against the Florida Department of Education. He said the district would have a strong case, and that a lawsuit would be less expensive than paying out the $3.6 million.
School board attorney Keith Martin said he made the recommendation to use capital funds to purchase the computer software in 2005 after researching legal opinions from across the state.
Under Florida Statute 1011.71, there is no definition of equipment, said Martin, who later used a legal opinion from 2000 to form his own recommendation that computer software is an allowable purchase.
“We all approved the purchase and where the money was going to come from, it is a capital purchase that lasts longer than five years,” said Teuber.
According to Teuber, the district’s outdated computer system has been used for more than 20 years, and he anticipates the new system will last just as long.
Board Member Robert Chilmonik said he is skeptical that the legislation will pass, and instead supports a reallocation referendum that gives the board flexibility to spend funds in the capital account.
He added that state officials were alarmed with an insistence that software purchases had been approved by FDOE in 2005.