Broward schools are off the hook from having to pay back $20 million in developer fees that state auditors had questioned.
A preliminary report sent in March by the state Auditor General said the district improperly used the fees designed to build new classrooms to pay off old debts.
That version said the district should restore those funds to its capital budget unless it could adequately explain its actions to the Florida Department of Education.
But now the district won’t have to. The Auditor General has completed its final report, which doesn’t include that conclusion.
“The auditor general took it off because they agreed it was not a finding,” Superintendent Robert Runcie said. “What we did was absolutely appropriate and proper.”
Micah Rodgers, who manages school district audits for the Auditor General’s Office, said in an email the district “provided additional documentation to correlate the purpose for collecting the impact fees and the benefit provided to the fee payer.”
The payments are known as “impact fees.” Developers of new residential neighborhoods pay these fees to the school district to offset the impacts that new students are expected to create. But state law has been unclear as to whether those funds can be used only for future construction to help pay off schools already built.
In recent years, the school district has received about $15 million in these fees, largely from the high-growth Parkland area. Skeet Jernigan, who represents local developers, argued that those fees must be used to build new classrooms serving developments paying the fees. But the district has used the fees to pay off other construction debts.
These funds have helped the district offset holes in the budget and keep school renovation projects funded through an $800 million bond going as cost for these projects have skyrocketed. If the district had to pay back the $20 million, it could bring some projects to a halt.
Jernigan said the district shouldn’t be collecting any fees from developers since it has about 20,000 vacant seats in the county and could adjust boundaries to accommodate all its students.
The preliminary Auditor General report cited a Florida Supreme Court decision that said districts “must demonstrate a reasonable connection, or rational nexus, between the expenditures of the funds collected and the benefits accruing to the subdivision.”
However, state law is less clear about how the money can be used.
The Auditor General made a similar finding two years ago for Miami-Dade schools, saying the district had to repay $17.7 million. In the past year, Lake and Lee counties have been similarly cited in audits.
“I’m a little surprised that they took it out because none of the information sent by any of the other counties was able to influence the Auditor General,” Jernigan said. “We do not concur with its removal.”
Still, the Department of Education has yet to penalize other districts based on similar Auditor General findings.
“Several large districts across the state have had an identical finding and no request has been issued to replay any funds,” school district spokeswoman Nadine Drew said in March. “It is the intent of the administration to comply with all federal and state statutes and based on communication with outside bond counsel, that has been done.”
stravis@sunsentinel.com, 561-243-6637 or Twitter @smtravis