The Lee County School District would not lose $3.6 million next year from its operating account to cover an unauthorized expenditure, according to members of the school board, after a legislative proposal submitted by state Sen. Garret Richter changes the way capital funds can be used.

Richter, R-Naples, said Tuesday that the school district would not lose the funds it used in the past for computer software.

“This bill includes a provision that should clear the confusion of the capital expense’s definition and should allow the Lee County School District to preserve the $3.6 million investments in computer upgrades,” he said.

In 2005 the school district used $3.6 million from the $550 million capital account to purchase computer software for an overhaul with Oracle-Peoplesoft.

School board Vice Chairman Steve Teuber said a loophole definition of “equipment” allowed the county and other districts to use capital funds to purchase software.

The district’s antiquated computer system has been in place for the last 20 years and officials are hoping the new system will last just as long.

The Florida Auditor General, on the other hand, said in a report last month that the district must replenish the $3.6 million by taking it out of the operating account and depositing it in capital.

Local schools are already facing budget shortfalls as high as $70 million in 2010, and additional loses could increase the number of anticipated layoffs and cuts to programs.

In the Legislature, Richter included the changes in Senate Bill 2254, co-sponsored by Sen. Nancy Detert, R-Venice, which increases flexibility for school districts statewide. The language redefines “equipment” to include software under capital expenditures.

“My desire is to support our school district during these difficult financial times by allowing them to determine the best use of their educational dollars,” he said.

According to the text of the bill, the purchase of new or replacement equipment, as well as software applications – that have a useful life of more than 5 years – will be in accordance with state purchase regulations.