Friday, March 12, 2010

Audit and Finance - Part Two

(Saturday Update: I managed to get some clarification about the Native American funding issue. That issue is part of an overall financial audit that the State Auditor's office does every year for certain programs that involve federal dollars. They are looking as well at Title 1 and Title 2 dollars as an example. The audit will NOT be done until May so we won't really know the outcomes until then.)

Mr. Harmon went on to discuss a double-sided sheet with "Average Class Size" on one side and "Large Grant Carry Forward: FY09 to FY 10". On the class size, he made a big deal out of how much work had to be done to...separate out the Special Ed and Bilingual kids from the class to get the average class size. Really? We have computers and stuff and this is a lot of work for someone? Interestingly, high school class sizes, for core subjects, have lower minimums and maximums than any other grade level.

On the grant carry forward - I don't get it. Title One, almost $1M for K-5 summer school and Early Learning Institute which I know nothing about. Then for LAP, almost $330K, for STEM planning year, MAP professional development and 6-12 summer school. I'm sure none of this is illegal but boy is it unseemly. Money meant for low-income students for their school year learning is diverted elsewhere. I don't care if what it is diverted for is worth it, the money should have gone into the classroom. Dr. Goodloe-Johnson said they are reallocating the money to schools because past spending hasn't shown results. It made no sense to me. She also said something about having to underspend on large grants to hold a reserve for "salary equalization and sick leave subs". Teachers, could you help me out here?

Michael asked if it was safe to say that we held back LAP money that we could have distributed to schools for STEM? Mr. Harman said, no we held them back to carry them forward. Oh.

Then there was a discussion about the WSS. Michael said that they have been cutting budgets since he had been on the Board and they need to have a discussion about what are enough resources for schools. "If we are being honest, we have become more and more dependent on self-help money (PTA)." 74% of PTAs, according to a PTA survey, pay for staffing and so that doesn't feel like we are providing that base level of staffing support. He said he wasn't worried about affluent schools or Title One schools but those schools in the middle that don't have enough F/RL and also don't have enough capacity to supplement budgets. (italics mine).

Sherry said she was uncomfortable with the flux in schools individually. "We need to daylight that."

Michael asked (and keep in mind the WSS was on the agenda) about the changes in WSS year to year? He was told they didn't have that number with them. Apparently the cost of a teacher this year from last year went down slightly and yet central office staff costs went up.

And from the "I told you" file: we don't have any real idea where the money is coming from to reopen the schools. Okay? The BTA levy money doesn't just magically appear. And so they were discussing where to get the money internally (because it is cheaper than borrowing it externally). They might "redirect" it from BTA II (so if you are on the end of the list for BTA II, your project might just get put on hold for a longer while) or use the reserves or the CEP (capital eligible projects - too long to explain but I don't think this will solve it all). So eventually, the money will come from BTA III but for right now, it'll come from some other pot of money that we really shouldn't be touching.

Michael said he thought the sales of surplus property could cover this. Wasn't there over $18M worth of property sold? He was told some of the money went to SBOC( when, for what?) and some deferred maintenance issues. (BOARD! ask for details and accounting. Where did all that money go?) Michael said he hadn't seen any accounting and it had been awhile. He was promised answers. Sure.

And then we come to the really, really upsetting and bad news. Once again, we have an SPS department, this would be the ELL and Bilingual Department, screwing up royally.

There was an audit of the Native American program (I think by the State Auditor but I'm checking.) Apparently, the district "misstated" the number of Native American students and used I.D. numbers that weren't for SPS students. (No, I don't know if this is for the Native American K-12 program at Wilson-Pacific or across the district.) Native American students get some sort of funding from the Department of Education. So now, we have to pay back the money we got over two years which is roughly $170K per year. Another finding of this audit was that they did not set up a parent advisory committee as required (big surprise - the district not doing public engagement with parents).

Michael, doing a slow burn, "Who is responsible?." Lots of shuffling of paper, unclear what controls were not followed, person in that position now gone (and I assume their supervisorwas , Carla Santorno, also gone), blah, blah, blah. The upshot is that someone used id numbers for people/students? from Canadian tribes. "It's unfortunate and costly, " said Mr Harman.

Interestingly, Michael said, out loud, that it sounded like this approaches fraud. Sherry jumped in and said well, we don't know, was there intent? Then, she says that she had met with with some Native American parents who said the program wasn't very robust and they were concerned.

To recap: we now have to pay back roughly $340K that we don't have. Someone used i.d. numbers of people not even IN this country to get money. Parents in the program don't feel like the program is working. So the district took in more money than it was supposed to for a program that isn't robust. So what was the money spent on?

Peter babbled on about going forward and controls and Mr. Harman said all the forms are being validated and cross-checked BUT the "double-whammy" is that the new person has focused all his time on this so our numbers could be late to the feds and we get moved to the bottom of the pile. So, basically, the district might have to find the funding for the actual Native American students we do have SOMEPLACE else (he said about $85k). Where? Just tell us where?

So there you have it. Our district at work. You know what? I hope the district gets just raked over the coals for this. There is something very wrong here and now we all get to pay and those students weren't even getting the program they deserved. Oh and Dr. Goodloe-Johnson left the room before this got announced and it happened on her watch.

(You heard this story here first. Linda Shaw from the Times was there but left the room before this discussion to talk to Dr. Goodloe-Johnson. I called one reporter but frankly, I was flummoxed at who might really care and do some solid reporting.)

(Update: I spoke to someone at the State Auditor's office. They are doing an audit on the Native American funding issue and it should be out in a week or so. It doesn't appear to be fraud. The district may get off the hook (slightly) as sometimes the feds negotiate a lower sum for repayment or no repayment at all. However, we still have to fund the existing students which seems to be an issue. I'll try to find out how this all ends because it seems like it may take months to resolve. I am still dismayed and troubled by how this happened and for two years.)

My summary:
  • Michael tried mightly to get answers. But my solution is to keep on asking until you do.
  • The Board is not getting the information they need or ask for in a timely manner. (And FYI, the final date for introducing the budgets - June 16th, with a public hearing soon after and then adoption on July 7th, the dead of summer. That works out well for the district, doesn't it?)
  • The Board needs to get a spine. All of them and right now.


ArchStanton said...

Is it just me or is the honeymoon over? I haven't paid close attention to these boards and the "going ons" at SPS for more than about two years, but I'm sensing that there's enough fishy business coming to the fore that something might happen soon. It feels like the pot is boiling over or something. Regardless of whether the mismanagement is due to intent or incompetence - it just seems like more and more people are becoming dissatisfied with they way things are being run and holding the powers that be up to a little more scrutiny. Hopefully, it's not too late because it feels like this ship is taking on water and sinking fast.

Jet City mom said...

at the last board meeting- quite a few students/parents ( Native American) testified to their school not filing certain forms on time ( this year or last year I am not sure), so their school will miss out on money.
I have to go find my notes I guess.

I appreciate Sherry trying to bail whomever out regarding intent but I think fraud is pretty much like plagiarism , it doesn't matter if you were ignorant of what constitutes plagiarism, it is your responsibility to find out.

Same with fraud.

How hard do you have to think to realize that using information from another country to get money from the US govt, is perhaps not kosher?

ttln said...

How do we get the state involved? This smells like an audit is in order. Not a self audit. But one that will "daylight" the ins and outs of our financials.
I find this totally alarming- and I know I have trust issues- but this smacks of corruption, internally. Too much "We'll get on that" or "It's too complicated to explain, but trust us, this is how we should do it." Wasn't the accounting department nailed for questionable practices with the Super prior to Raj? What up?

This is public money. The books are public record. We need them made public and the spending transparent.

My auditor's heart is telling me that books need some looking at by someone not on the payroll.

ttln said...

emeraldkitty, exactly.
whose idea was this? who approves/signs off of the paper work? I don't mean the peon that does the clerical work.

We just got a district email from Don Kennedy. Classic, budget information at almost 4:00 on a Friday. When most of us won't be here until Monday to see it.

Melissa Westbrook said...

See my update on the Native American funding issue (I wanted it to be in the thread).

Hippy Goodwife said...

I would also like to know how to get the state involved in an audit. The money just seems to flow freely away from the classrooms. It is unconscionable how much is wasted, how many tax dollars are unaccounted for.

I would like some answers from a source outside the district. Like everyone else here I just cannot understand why the board does not demand real answers.

SSDemp said...

Again, thank you ladies. I was beginning to think I was just too stupid to follow.

Welcome to the "elected officials as mushrooms" style of District administration.

yumpears said...

Does anyone know how long Don Kennedy has been CFO? I'm reading the WA State Auditors Report for the fiscal year ended 2008 (the most recent audit) and SPS is clearly deficient in their financial reporting. Ugh

I have to say that if I ever got this kind of report from our auditors where I work, I would not have a job.

Meg said...

In the carry-forward/STEM discussion, I very much got the sense that DeBell was asking: does the district hold back money so that they effectively have a strategic initiative fund? In the last Audit & Finance meeting, he asked similar questions. And was stonewalled in similar fashion. Instead of answering "yes, we hold money back for what is basically a strategic initiative fund" or "no, we don't," Mr. Harman chose simply to say that at the time of the hold-back, they had not earmarked the money for STEM.

The performance management money is $3.1m. $2m comes from Title money and $1.1m comes from FRL. Schools were told that the threshold for being a Title school was raised because of the requirements for paying SES providers - so how is there $2m in Title funds for the district to hang on to? And why on earth does performance management require that much money?

Dorothy Neville said...
This comment has been removed by the author.
Dorothy Neville said...

Don's a friend of Maria.

seattle citizen said...

On Native American funding:
"someone used id numbers for people/students? from Canadian tribes...we now have to pay back roughly $340K that we don't have. Someone used i.d. numbers of people not even IN this country to get money."
I'm certainly not sure about this, but I have friends who are NA US citizens while also holding tribal affiliation with some Canadian tribes. This was set up quite a few years ago because the arbitrary division at teh border resulted in the Canadians and the Americans each "identifying" tribes on their own, thus separating cloely knit family and clan groups. To fix this, there is an agreement that recognizes a sort of dual citizenship for some tribal members who have shown they are really of one group, a group that was separated during the treaty years and after.
So, again I am not sure, but a guess might be that some NA youth are of this dual category, might live in Canada even, yet be entitled (rightly so, in my opinion) to citizen and tribal benefits down here at the same time.

Charlie Mas said...

I remember Michelle Corker-Curry telling me how hard it was to get people to come to the Native American Parent Advisory Committee meetings. She provided transportation, dinners, and childcare and still only got a handful of people to show.

It appears that after she was laid off no one stepped in to do the job.

Did anyone make a note of all of the times that staff promised to provide information in a follow up? Is there a list of all of the questions that they will answer next time?

If no one on the Board made such a list - and there is no evidence that they do - then someone should do them the service of putting it together and providing them with it.

It's hard to believe that Cheryl Chow could sit through these meetings and then conclude that the Board should approve every motion brought before them because by the time it reached the Board it had been thoroughly vetted by professionals.

It's hard to believe that Peter Maier stills buys that load of crap. And yet it's clear that he does.

Melissa Westbrook said...

Seattle Citizen, that all may be true. The problem was there were not the bodies to fit the number of ids. So the district didn't enroll people they shouldn't have, they just didn't enroll them at all. I wouldn't have had a problem with Seattle kids who had Canadian tribal affiliations either but they just didn't exist as students.

Unknown said...

If the Board members are not getting the information they want and need, they should make public records requests via Joy Stevens. The ENTIRE budget down to all the nitty gritty should be requested and made available to the Board. It may be 6 inches high but that's better than not receiving it. Board members who wish volunteers to help sift/analyze should put the word out; I'm sure many volunteers would step forward. And by the way, all the salary information is not confidential, since SPS is a public agency, although there may be certain restrctions; see lbloom.net for salary info in certain cases.

Michael said...

"If the Board members are not getting the information they want and need, they should make public records requests via Joy Stevens."

If Board members are not getting the information they request from the staff that they ultimately direct, they need to DEMAND that it be produced. If the public can request information, then the Board should be able to get the same information without having to jump through the hoops of a public records request. They are not considered members of the "public" like you or me. They are the elected officials ultimately held responsible for what happens at the District.

Melissa mentioned that the superintendent left the meeting before the indian funding issue was brought up by Mr. Harmon. I wonder if she is aware of it. I certainly hope so.

Unknown said...

Michael, definitely agree w/ your suggestion Board members demand-- problem is such a demand has no legal teeth (and Board members have made unequivocal requests on a number of occasions). That's why I suggested public records request, as failure to comply can carry penalties.

Patrick said...

If the Board have to make public records requests to get information from a staff member, they should request the staff member's resignation at the same time. The staff is supposed to work for the board, not vice versa.

Charlie Mas said...

So, here's a funny thing: the Board can't demand anything from any staff member except the superintendent.

It's a weird little rule, but the Board has only two employees. One is an auditor (I wish we heard more from him) and the other is the superintendent. The rest of the staff report to the superintendent - not the Board. They don't take orders from the Board and the Board can't give them orders.

I know that it looks like they do, but officially, and really, they don't. If the staff does something for the Board it is a courtesy and even then is only done with the superintendent's approval.

The Board can't fire them for failing to answer a question or provide information or even for providing misinformation.

It's subtle, but you'll see it in effect at committee meetings where staff are not-exactly given assignments by the Board.

It's just one of those odd things about how the District works that you wouldn't presume.

Patrick said...

Sure, the staffs work for the superintendent. So the board should say to the Superintendent (really, should have said some time ago) direct your staff to answer Board questions, or resign.

Leslie said...


Can you start a new thread on budgeting at the school level so we can share information?

The Times article advising of the $8Million cuts to schools (in addition to the $8M cuts at JSC) came just after the budgets were due downtown for vetting by the analysts and HR folks - this after countless hours of vetting and HARD choices at each building by its staff, BLTs and PTSAs who are no doubt being called to supplement those budgets.

What are the due dates again for each building's budget? For notice to RIFFed teachers, to bidding for other jobs by RIFFed teachers (is it the same for the laid off coaches as well), and to re-hire letters? How does that chronology match up with the NSAP for real numbers and assignments?

Thanks for all that you do.