Audit and Finance - Part One
(Note: I was just despairing to someone over trying to boil these meetings down and yet providing the context and back and forth of discussions. I'll try to do a general summary but this is for wonks and those who want to know what the discussion was about.)
I attended the Audit and Finance Committee meeting yesterday (as did Meg Diaz and Chris Jackins). I came away fairly depressed and overwhelmed. Depressed about the financial state our district is in and overwhelmed with data and paper. I also wonder, really wonder, who in our district administration really know what happens to the money (more on that later) and I wonder if the Board fully gets it.
What is frightening, truly frightening, are two things. One, that a heck of a lot of money gets carried forward, held back, moved, paid back later and who really tracks it all. I could spend all my days and nights going over it and I doubt I would ever figure it all out. Two, the Board, while trying, is not really going to hold anyone's feet to the fire. They talk a good talk but either they are overwhelmed with data and/or they just don't have the stomach or spine to say what they really want. (Example to follow.)
The meeting opened with some 3 suits explaining an upcoming sale of SPS bonds (for $34M). Two of them were from the PFM Group (Public Financial Management) and the other one was from K&L/Gates, a large law firm here in Seattle. I don't know the exact purpose of selling the bonds; I'll have to ask. This is happening around the end of April and it was kind of charming how exciting they made it sound. It's actually kind of like an E-Bay auction where, apparently, they will get bids up to the last seconds.
K&L is one big expensive machine. I was told, laughingly by the lawyer, that they "didn't get paid by the hour". But how much these two firms and their work cost us, wow, I'll bet it's a heck of a lot of money. (Yes, I know the district couldn't put this together themselves but did they have to hire someone so expensive? She didn't say they were doing it pro bono so I know it's not free.) I also learned that even though the district lost a lawyer recently (Shannon McMinimee, I still love her name), we have hired her as a consultant from the firm she now works for. We all know how much consultants cost. What does our Legal department actually handle on its own?
There was also a monthly financial report (but dated from December). What was interesting here was on page two, the enrollments grade by grade in the district from 2005 to today. The numbers have gone up (but not in a huge way in any grade). The biggest growth from the 2009-2010 adopted budget to the projections as of 12/31/2009 was in 9th grade - 737 students. That's huge (kindergarten was 18). Clearly, the economy or something compelled people to put their students into SPS high schools. Even the sophomore number went up by 92 students. Where we lost students (and this is scary because it means we have kids steadily dropping out) is at 11th and 12th grades. In 2005-2006, there were 3,338 11th graders and it started dropping from there. The projection for 11th grade from December 2009 is 2770. Then, in 12th grade, in 2005-2006, there were 3,247 students. It's now 2,590 students. Also, the number of Running Start students is also dropping.
There was discussion over the timeline for the budget process. There will be discussion about it at the Board retreat this Saturday. Apparently the Board is working on "guiding principles" for the budget for staff to work with. But it seems that they need to add yet another Work Session to get it all done. This will be on April 8th. So hear this: SPEAK UP NOW. Tell the Board what matters to you and your school.
Michael was trying to get a kind of drop-dead date to restore money to school budgets but staff really circled around it. One issue is that the legislature did not finish today and so will go into Special Session starting on Monday. (They did some education bills passed but obviously, not the final state budget which includes education funding.)
Don Kennedy said May 15th is the date for notification of certificated staff and April 20th is the date for classified staff. Michael again asked for a date, saying could you adjust school budgets after April 16th? Don said yes unless they change the timeline. He said that HR processing is the key and the pressure point (it seems letters go out about a week to 10 days before notification). Michael again stated that he wanted to be sure to restore funding to schools if the legislature comes through (they are hoping for the House's budget bill, not the Senate's). (I'll do a separate thread on legislative issues in education.)
Then they talked about the cuts at Central Administration and what a sad day it had been at headquarters. (There was a sheet handed out named "Central Reductions Summary".)
Michael asked how many coaches were still in the pool and I swear they said there were a "handful of baseline supported" coaches. Here's the deal: some are funded baseline and some off of grants. Last November, Mr. Kennedy said there were 116 coaches (this was around Meg's work) at around $10M. Then that number dropped, magically, to 100 around January. Looking at the Reductions sheet, they have dropped 17 ( are consulting teachers coaches, I don't know).
Michael never got a real number. And right there is one HUGE problem. The Board does NOT get real answers and let's staff off the hook. How many coaches are there overall in this district right now and after these cuts? That isn't that hard a question and yet, no one knows the answer and it's BS. The Board has got to stick to its guns when anyone asks a question.
There was some talk about how many cuts central could take and provide needed services to the schools. This is an interesting question because besides the basics of security, custodial, supplies - could a school do okay without central? What if Central furloughed for a week? Would the district fall apart? There was also the question of certain compliance issues for some funding that comes to the district.
Michael came back with the issue that the Board really isn't getting the big picture of all the pots of money and all the positions in Central. He seemed very frustrated at not being able to have this information in order to make budget decisions. Dr. Goodloe-Johnson said she didn't know what he was talking about (in reference to the positions). He stated that the most direct delivery of services to students is the schools, then the support services, then central and that he wondered if they had examined all parts of the system. He said the fact that cuts have already reached the schools and yet not everything has been put out there was troubling. He said, "I don't want to lose command and control for strategic goals nor do I want to weaken the classroom to the point where strategies can't be absorbed because of class size and staffing." He said he wanted ALL options on the table and that even if they came to the exact same conclusions, he wanted it all examined. (Good luck with that Michael. I did not see the heads nodding from around the table that you might have thought.)
It was explained that there had been some "performance management pullbacks" from F/RL at some schools ($1.1M). (Can I explain this? No but it seems like some kind of punishment to me.) This was explained as a "carry-foward". Again, a lot of holding, shifting, and carrying over of money.
Michael pressed again on not seeing the full picture on the coaches and Sherry picked up that baton. She said that they had seen reductions but that staff costs had increased so how did it help? Duggan Harman said he would get back to her.
I attended the Audit and Finance Committee meeting yesterday (as did Meg Diaz and Chris Jackins). I came away fairly depressed and overwhelmed. Depressed about the financial state our district is in and overwhelmed with data and paper. I also wonder, really wonder, who in our district administration really know what happens to the money (more on that later) and I wonder if the Board fully gets it.
What is frightening, truly frightening, are two things. One, that a heck of a lot of money gets carried forward, held back, moved, paid back later and who really tracks it all. I could spend all my days and nights going over it and I doubt I would ever figure it all out. Two, the Board, while trying, is not really going to hold anyone's feet to the fire. They talk a good talk but either they are overwhelmed with data and/or they just don't have the stomach or spine to say what they really want. (Example to follow.)
The meeting opened with some 3 suits explaining an upcoming sale of SPS bonds (for $34M). Two of them were from the PFM Group (Public Financial Management) and the other one was from K&L/Gates, a large law firm here in Seattle. I don't know the exact purpose of selling the bonds; I'll have to ask. This is happening around the end of April and it was kind of charming how exciting they made it sound. It's actually kind of like an E-Bay auction where, apparently, they will get bids up to the last seconds.
K&L is one big expensive machine. I was told, laughingly by the lawyer, that they "didn't get paid by the hour". But how much these two firms and their work cost us, wow, I'll bet it's a heck of a lot of money. (Yes, I know the district couldn't put this together themselves but did they have to hire someone so expensive? She didn't say they were doing it pro bono so I know it's not free.) I also learned that even though the district lost a lawyer recently (Shannon McMinimee, I still love her name), we have hired her as a consultant from the firm she now works for. We all know how much consultants cost. What does our Legal department actually handle on its own?
There was also a monthly financial report (but dated from December). What was interesting here was on page two, the enrollments grade by grade in the district from 2005 to today. The numbers have gone up (but not in a huge way in any grade). The biggest growth from the 2009-2010 adopted budget to the projections as of 12/31/2009 was in 9th grade - 737 students. That's huge (kindergarten was 18). Clearly, the economy or something compelled people to put their students into SPS high schools. Even the sophomore number went up by 92 students. Where we lost students (and this is scary because it means we have kids steadily dropping out) is at 11th and 12th grades. In 2005-2006, there were 3,338 11th graders and it started dropping from there. The projection for 11th grade from December 2009 is 2770. Then, in 12th grade, in 2005-2006, there were 3,247 students. It's now 2,590 students. Also, the number of Running Start students is also dropping.
There was discussion over the timeline for the budget process. There will be discussion about it at the Board retreat this Saturday. Apparently the Board is working on "guiding principles" for the budget for staff to work with. But it seems that they need to add yet another Work Session to get it all done. This will be on April 8th. So hear this: SPEAK UP NOW. Tell the Board what matters to you and your school.
Michael was trying to get a kind of drop-dead date to restore money to school budgets but staff really circled around it. One issue is that the legislature did not finish today and so will go into Special Session starting on Monday. (They did some education bills passed but obviously, not the final state budget which includes education funding.)
Don Kennedy said May 15th is the date for notification of certificated staff and April 20th is the date for classified staff. Michael again asked for a date, saying could you adjust school budgets after April 16th? Don said yes unless they change the timeline. He said that HR processing is the key and the pressure point (it seems letters go out about a week to 10 days before notification). Michael again stated that he wanted to be sure to restore funding to schools if the legislature comes through (they are hoping for the House's budget bill, not the Senate's). (I'll do a separate thread on legislative issues in education.)
Then they talked about the cuts at Central Administration and what a sad day it had been at headquarters. (There was a sheet handed out named "Central Reductions Summary".)
Michael asked how many coaches were still in the pool and I swear they said there were a "handful of baseline supported" coaches. Here's the deal: some are funded baseline and some off of grants. Last November, Mr. Kennedy said there were 116 coaches (this was around Meg's work) at around $10M. Then that number dropped, magically, to 100 around January. Looking at the Reductions sheet, they have dropped 17 ( are consulting teachers coaches, I don't know).
Michael never got a real number. And right there is one HUGE problem. The Board does NOT get real answers and let's staff off the hook. How many coaches are there overall in this district right now and after these cuts? That isn't that hard a question and yet, no one knows the answer and it's BS. The Board has got to stick to its guns when anyone asks a question.
There was some talk about how many cuts central could take and provide needed services to the schools. This is an interesting question because besides the basics of security, custodial, supplies - could a school do okay without central? What if Central furloughed for a week? Would the district fall apart? There was also the question of certain compliance issues for some funding that comes to the district.
Michael came back with the issue that the Board really isn't getting the big picture of all the pots of money and all the positions in Central. He seemed very frustrated at not being able to have this information in order to make budget decisions. Dr. Goodloe-Johnson said she didn't know what he was talking about (in reference to the positions). He stated that the most direct delivery of services to students is the schools, then the support services, then central and that he wondered if they had examined all parts of the system. He said the fact that cuts have already reached the schools and yet not everything has been put out there was troubling. He said, "I don't want to lose command and control for strategic goals nor do I want to weaken the classroom to the point where strategies can't be absorbed because of class size and staffing." He said he wanted ALL options on the table and that even if they came to the exact same conclusions, he wanted it all examined. (Good luck with that Michael. I did not see the heads nodding from around the table that you might have thought.)
It was explained that there had been some "performance management pullbacks" from F/RL at some schools ($1.1M). (Can I explain this? No but it seems like some kind of punishment to me.) This was explained as a "carry-foward". Again, a lot of holding, shifting, and carrying over of money.
Michael pressed again on not seeing the full picture on the coaches and Sherry picked up that baton. She said that they had seen reductions but that staff costs had increased so how did it help? Duggan Harman said he would get back to her.
Comments
Melissa, my thought exactly. The City of Seattle has been doing this. Seattle Public Library has closed for two weeks the past TWO years. It is a no brainer for me Central Administrative types should do this. The budget is on life support. The Superintendent and other highly paid staff should take a pay cut. How about leading by example? If nothing else it would be symbolic and might help with contract negotiations,which are going to be difficult.
The ballyhooed growth of the district last spring did not pan out in the younger grades. REA tracks enrollment on their portion of the SPS website and the numbers are stable no humongous increase of butts in seats. Regarding more 9th graders, private high schools are notoriously more expensive than private 1-8's. Also, regarding the loss of numbers at 11 and 12:are they really drop outs or going to a different school districts? Does the District know?
Secondly, the inability to show central staffing in an understandable manner is complete and utter bunk. You spit out one comprehensive HR flow chart, broken out by the 3 top level departments: COO/CAO/Gen. Counsel down to individual positions. Each job shows its function as well as current and “topped out” salary and its funding source (state, grant, local levy, etc.) Add a multiplier to each position to handle its associated benefits (health, etc.)
Now go back and spit out the report again, showing mandated operational costs associated with each position, such as District-produced training, travel, etc.
Take this and compare it against a 3rd list of prioritized capital and operational projects, by department, for the remainder of this year and for 2010-2011.
The Board should tell, not ask, that this information be supplied in one-week’s time. Three days should actually suffice.
The public should get a copy of this, minus “current” salaries, if/as protected by law. Anything less should be viewed as willful obfuscation by the District Central Administration. In addition, it should be taken as a clue that HR and Finance employees be replaced with people who have job skills relevant to 2010. (No whining about antiquated internal systems.)
Then we have a public conversation about finances and priorities that is based on straightforward data.
And should furlough time be considered, where not prohibited by contract? Heck yes.
On consultant costs, I have a demotivational poster hanging in my cube that reads "CONSULTANTS If you're not part of the solution, there's good money to be made in prolonging the problem." Unfortunately, it's all too true in some cases. It's kinda funny how people get all hung up on the number of FTEs, but most people don't complain if laid-off people get hired back in as consultants at twice the hourly rate. I'm not saying cuts aren't needed at HQ, but if they're just going to go out and contract them back in again, I don't see the gain.
Eric
Welcome to the "elected officials as mushrooms" style of District administration.
I'll get back to you on that? Really? What the hell have you been doing all week? This is just ridiculous. And they dare to insinuate that teachers are lazy and overpaid.
I've never had a teacher say, "I'll have to get back to you on that" when I ask them a question!
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