This is an extensive investigative report about the July 31, 2018 letter hand delivered to Carter Morrison, School District of Indian River County (SDIRC), FL Assistant Superintendent of Finance/CFO, from SDIRC Superintendent Mark J. Rendell, Ed.D., in which Mr. Morrison was “relieved of your duties.”
The letter from Dr. Rendell said the SDIRC would be conducing “an investigation involving allegations of wrongdoing.”
From our review of a public records request available on 11/29/2018, Dr. Rendell alleged Mr. Morrison “submitted a proposed Tentative Budget to the School Board that contained a balance of less than 5% of revenues…in an effort to undermine me and the School Board…This was due to large budget increases for non-discretionary salaries for 12 schools which were not associated with an increase in instructional or other staff.”
And that he [Mr. Morrison] “made a budget transfer of approximately $ 2.3 million dollars out of the general operating fund without my permission.”
THE SDIRC INVESTIGATION:
In a letter dated August 1, 2018, Susan D’Agresta, Esq. of the firm Garganese, Weiss & D’Agresta, SDIRC’s outside attorney, wrote a letter to Wayne L. Helsby, Esq., of Allen Norton & Blue, PA, another of the SDIRC’s outside attorney’s, “to provide legal services to and behalf of Dr. Mark J. Rendell…,” which were paid for by the SDIRC.
“The scope of the engagement is to provide legal advice and counsel to the Superintendent and investigate the incident involving Mr. Carter Morrison…A not to exceed budget of $ 50,000 has been established for this scope of service.”
Our review of the salient points of the Allen Norton & Blue investigation made public 11/19/18, as submitted by Susan Potter Nelson, are as follows:
- Third paragraph: “My investigation focused on the chain of events and Mr. Morrison’s intent. I do not have the expertise to address and I have not attempted to address the various processes required in preparing the budget.” (Emphasis added)
- “Mr. Morrison in no way intended to undermine the Superintendent by submitting the Tentative Budget with only 3.5% revenues remaining in Unassigned Accounts.”
- “I have also concluded that the dramatic increase in the Non-Discretionary from the previous budget year was caused by an error in the formula…”
- “It should be noted that there were changes in Personnel in the Finance Department, which may have affected the dissemination of information necessary for Mr. Morrison to prepare the tentative budget.”
- “It is also clear that Mr. Morrison exercised very poor judgement in not immediately discussing the increase in the Budget by 2.3 million dollars with the Superintendent and instead, unilaterally made the upward adjustment in the Budget, which in turn reduced the percentage of the Unassigned Fund.”
- “Although I find that Mr. Morrison in no way intended to undermine Dr. Rendell, I do find his failure to immediately advise his supervisor, the Superintendent that based on the Last Minute Submission (Emphasis added; see below) by Mr. Smeltzer, the School Board was potentially facing 4.1 million dollar increase in salary, and to discuss with him his proposal to reduce it to 2.3 million dollars, to be not only an exercise of very poor judgement but a breach of trust.”
“LAST MINUTE SUBMISSION” DESCRIBED BY MR. MORRISON.
STATEMENTS FROM MR. MORRISON’S WRITTEN STATEMENT:
An eight page “Written statement by Carter Morrison regarding events from July 10 – 31 regarding the School Board of Indian River County’s Tentative Budget” was included with the public records request.
“At or around 4:30 p.m. that afternoon [The Tentative budget needed to be printed at 5:30 p.m] Mike brought the results of his analysis…in order to add the budget that was needed to ensure that appropriate funding was in place at the sites for vacancies. I was shocked and taken aback when he presented a total of $ 4.1 million dollars to be added to the budget. [Mike Smeltzer, Position Control Specialist and Personnel Systems Manager.]
It was now approaching near 5:00 p.m. and I received an email from Dr. Rendell stating ‘do we have any materials ready for the Board Workshop?’
I decided to look at the remaining teacher vacancies that I had received from HR and made the call to enter $ 2.3 million into the system to account for the vacancies as I recognized that there would be some level of vacancies to cover but certainly not the 65.4 vacancies at a cost of $ 4.1 million.
At or about 5:00 p.m. Dr. Rendell came to my office and asked how are we doing? Frantically, I stood in my office doorway and said to him that HR had given me a list of vacancies last minute and I was trying to figure this out and get the Tentative Budget Book done. He remarked that ‘I have complete faith in your ability to get it done.’ He stormed out of the office and said under his breath that ‘I can’t even give the guy a complement.’ This briefing happened in the presence of my assistant Lynn Justen. The Budget Book and associated materials were subsequently published on or about 5:30 – 6:00 p.m.”
He then asked what to do with the Board tomorrow at the Public hearing, and I suggested to him we discuss the corrected budget pages, spreadsheet formula error and suggestions with the Board, explain that we are at 3.5% but it is only a tentative budget and we will give assurance that we can only get to 5% by September’s final budget hearing. He seemed very dismissive of this recommendation and pointed to my analysis and emphasized ‘obviously it will be better for me if I can go in at 5.76%.’
…I told him I would write a memorandum to him in the morning and so we can forward to the school board prior to the public hearing as we know this would come up. He said ‘how soon can you get this done?’ and I said I would do it first thing in the morning when I get to work.
As soon as I arrived at work I drafted the memorandum to him…and took a draft of the memo to Dr. Rendell for his review. He insisted that I add language…that specifically stated that the funds were reversed at his direction. I then proceeded to add the language to the memorandum and took it to him again for his review. This review was done in my office to which Dr. Rendell said ‘I don’t know any other way to say it Carter so I am just going to say that you entered the $2.3 million dollars in the budget that drew down the fund balance.’ I replied that yes I did enter $ 2.3 million but the analysis shows that at least $ 2 million was warranted as we had previously discussed and agreed.
…on or about 1:30 p.m. Dr. Rendell came into my office, closed the door…gave me a letter signed by him that stated that I am being relived me of my duties…and being ‘reassigned in an attempt to conduct an investigation into allegations on wrongdoing.'”
I attempted to pick up my budget book…and he said I could not take it. He said ‘you can take either door you want.’ After 12 years of distinguished service, Highly Effective evaluations, five superintendents, stellar service to Board members, students and community it all came down to which door I wanted to exit through. I left the building through the Finance Department with my head held high.”
With regard to the memorandum, a whistle blower we have been communicating with at the District, who provided us with the two images, wrote:
At a September 11, 2018 Superintendent’s Workshop Audit Chairman Robert Auwaerter indicated that Carter Morrison was “quite helpful” in our meeting on District employee benefits and cost and delivery services. “Carter did a really good job on presentations and knowledge set.” Mr. Auwaerter is a retired head of the Fixed Income Group at Vangard where he managed and international team of 125 professionals responsible for investing $750 billion of assets.
Also of note, an article by Kathleen Sloan of Veronews. com on 9/3/18: “At a July 31 public hearing on the school district budget, Rendell portrayed himself as the hero and Morrison as the villain, claiming he had just discovered shady budgeting practices perpetrated by Morrison – even though those same practices were pointed out to Rendell and the board twice over the past two years.”
MR. MORRISON’ TRANSFER
In a letter hand delivered to Mr. Morrison on November 15, 2018 from Dr. Rendell, Dr. Rendell wrote that “because of your breach of mine and the District’s trust and poor financial judgement, I find it necessary to recommend your transfer to the position of Transportation Coordinator.
As per District policy, you are prohibited from acting in a manner or encouraging others in a manner that could be perceived as retaliation.
Future violations of the School Board Policy of failure to comply with anti-retaliation directives may result in progressive discipline up to and including termination.”
MANEUVERING TO AUTHORIZE MR. MORRISON’S TRANSFER
Regardless of who knew what, did what and when, the most fascinating aspect of this report seems to be that there was some maneuvering to have the School Board authorize Mr. Morrison’s transfer on November 30.
For one, the extended timeline.
Mr. Morrison was relieved of his duties on July 31, 2018. Why did it take until November 20, 2018 to try and have Mr. Morrison’s transfer approved by the School Board?(Although the investigation did need to take place.)
November 20 was the first meeting of three new Board members. Why was it delayed until the new members first met?
Mr. Morrison was transferred to the position of Transportation Coordinator in a letter dated November 15, 2018.
The Allen Norton & Blue, PA investigation was made available to the public on November 29, 2018, the day before the School Board meeting.
The transfer of Mr. Morrison was included in the “Consent Agenda.”
At every board meeting, at least a few items come to the agenda that do not need any discussion or debate either because they are routine procedures or are already unanimous consent. A consent agenda allows the board to group and approve all items together without discussion or individual motions.
Whereas an “Action Item,” on the agenda relates to a specific subject requiring discussion.
The maneuvering to “rubber stamp” Mr. Morrison’s transfer did not work. The comments below from the three new School Board explain why.
Dr. Mara Schiff: “This is the first time we can discuss this as a Board… I do not feel that I have sufficient information to make a decision… This has been going on for a long time and it needs to be resolved and there’s some pressure to get it resolved…For that reason I’ve moved to have it in the Action Agenda until I feel confident that I’m clear about what happened, what the processes were and the integrity of these processes.”
Teri L. Barenborg: “I want to respect everyone’s rights here and the timing on this is very difficult. I think something that has been going on this long and then have a new Board vote on it the first night of our Board meeting it is very difficult…I received the confidential documents an hour before the meeting..I’d like to table this or have an independent audit with someone who understands school budgeting and finance…He has been CFO for how many years, it at least deserves…discussion..”
Jacqueline Rosario: “…It was an investigation none of us have been given enough time to review the entire report…I don’t think an hour is sufficient to delve into all the details.”
Ms. Rosario made a motion, seconded by Ms. Barenborg to “postpone” further discussion on the matter until the December 11, 2018 Board Meeting and discuss it as an Action Item. The motion carried four to one, with Ms. Justice dissenting in favor of keeping Mr. Morrison’s transfer as a Consent Item.
It is also worth noting that during their discussion Susan D’Agresta, Esq. indicated that due to a law governing school boards with regard to the hiring and transferring of employees that if the Board denied the transfer recommended by the Superintendent “it’s possible the Board would be subject to a legal challenge…without good cause to reject the recommendation.
Reached for comment, a former School Board member said: “It was a tentative budget… He didn’t lie or steal something.”