Indiana

IPS shocker: $30 million deficit was phony

PHOTO: Scott Elliott

The $30 million deficit Indianapolis Public Schools has been bemoaning for nearly a year doesn’t exist, new Superintendent Lewis Ferebee said today.

In fact, Ferebee told the school board, IPS ended 2013 with an $8.4 million surplus.

Based on his own analysis, corroborated by the district’s attorneys and an accountant, Ferebee concluded the deficit was a phantom and speculated that IPS’s prior administration “intentionally overstated expenses to protect our cash balance,” he said.

“I’m at a point now where I feel like I have enough information to confirm that we don’t have a structural deficit,” he said. “I think it’s important to be transparent with the community.”

The revelation comes as IPS approaches its budget-making season and may instantly relieve the need for drastic cuts the school board was expected to consider to try to rein in what it believed to be massive overspending. In other words, it could keep schools open, save teachers’ jobs and keep programs that benefit students from being cut.

“I sought counsel from our legal counsel and also the CPA of our legal firm,” Ferebee said. “They said, ‘you’re not crazy. We see some of the same things.’ ”

In recent years under former Superintendent Eugene White, the district made nearly annual announcements of deficits, which led to layoffs, pay freezes and cuts in programs and services for students. Ferebee said he believed those reports of deficits were designed to quietly keep a strong cash balance to cover any unexpected expenses that might otherwise be difficult to address during the school year. Board members and the public were led to believe IPS was falling short financially, he said. White and former interim Superintendent Peggy Hinckley said late Tuesday they were skeptical of Ferebee’s analysis.

Ferebee said he believed the practice went back years. Without naming names he also said he expected unspecified “personnel changes” would be one of the results of his investigation.

Last year, interim Superintendent Peggy Hinckley raised alarms about the deficit, suggesting IPS would have to consider closing as many as 10 schools to get its spending under control. Hinckley, who was replaced by Ferebee in September, predicted IPS would have to tap reserve funds to make it through this school year.

But Ferebee said he discovered a disconnect when he began digging into IPS’s financial position during the district’s winter break in December. The numbers didn’t add up, he said.

What he found, Ferebee said, was the district’s budgeting system was entirely disconnected from its actual spending and income. To make the budget, Ferebee said, IPS used estimated revenues and included in its spending plan a host of programs and initiatives that were more speculative than real.

For example, Ferebee said IPS included in its budget in recent years the creation of a science and technology magnet high school, setting aside dollars for a school that was never launched. The school board, he said, was unaware that this money was not being spent, even at year’s end. Board members were never shown the difference between what budgeted and what was actually spent.

IPS’s budget projected revenue of $244 million and $274 million in spending for the calendar year that just ended in December of 2013. The $30 million difference was the deficit that district officials repeatedly said since last spring needed to be closed, and which prompted Hinckley’s call for school closings.

But at the end of the year, Ferebee said, the actual spending number was quite different. While revenue was close to the projection at $246.2 million, spending was much lower at only $237.8 million, resulting in an $8.4 million surplus, not a deficit.

“I had a lot of emotions,” Ferebee said of his reaction once he was certain his numbers were right. “It was very disappointing for me that we were communicating we had a budget deficit when we actually didn’t.”

A report on IPS’s operations released last month by the Indianapolis Chamber of Commerce referenced the budgeting problem and recommended moving toward a budget based on actual numbers instead of projections. Ferebee said the plan going forward is for monthly reports to the board on actual spending and revenue compared to the budget projections for both.

While the vanishing deficit may be hard to explain to the community, it’s also a golden opportunity to demonstrate a new level of transparency about the district’s decision making, Ferebee said.

For students and teachers, Ferebee said a surplus instead of a deficit means IPS likely will not face school closings or layoffs this year. Ferebee said IPS is entering talks with unions about revamping its compensation system, and the surplus means raises at least could be considered. Most district employees have not had a raise in five years beyond automatic hikes under union contracts that reward added years of experience and additional education credits earned.

For parents and students, it also means IPS can look at how to make changes to try to improve learning, not just focus on ways to save money, Ferebee said.

“This is an opportunity for us to be more strategic in our efforts in terms of how we support students and families and how we improve student outcomes,” he said. “We have a long way to go as it relates to improving student achievement. Knowing that we don’t have a structural deficit definitely opens doors of opportunity for how we support our students.”

call out

Our readers had a lot to say in 2017. Make your voice heard in 2018.

PHOTO: Chris Hill/Whitney Achievement School
Teacher Carl Schneider walks children home in 2015 as part of the after-school walking program at Whitney Achievement Elementary School in Memphis. This photograph went viral and inspired a First Person reflection from Schneider in 2017.

Last year, some of our most popular pieces came from readers who told their stories in a series that we call First Person.

For instance, Carl Schneider wrote about the 2015 viral photograph that showed him walking his students home from school in a low-income neighborhood of Memphis. His perspective on what got lost in the shuffle continues to draw thousands of readers.

First Person is also a platform to influence policy. Recent high school graduate Anisah Karim described the pressure she felt to apply to 100 colleges in the quest for millions of dollars in scholarships. Because of her piece, the school board in Memphis is reviewing the so-called “million-dollar scholar” culture at some high schools.

Do you have a story to tell or a point to make? In 2018, we want to give an even greater voice to students, parents, teachers, administrators, advocates and others who are trying to improve public education in Tennessee. We’re looking for essays of 500 to 750 words grounded in personal experience.

Whether your piece is finished or you just have an idea to discuss, drop a line to Community Editor Caroline Bauman at [email protected]

But first, check out these top First Person pieces from Tennesseans in 2017:

My high school told me to apply to 100 colleges — and I almost lost myself in the process

“A counselor never tried to determine what the absolute best school for me would be. I wasted a lot of time, money and resources trying to figure that out. And I almost lost myself in the process.” —Anisah Karim     

Why I’m not anxious about where my kids go to school — but do worry about the segregation that surrounds us

“In fact, it will be a good thing for my boys to learn alongside children who are different from them in many ways — that is one advantage they will have that I did not, attending parochial schools in a lily-white suburb.” —Mary Jo Cramb

I covered Tennessee’s ed beat for Chalkbeat. Here’s what I learned.

“Apathy is often cited as a major problem facing education. That’s not the case in Tennessee.” —Grace Tatter

I went viral for walking my students home from school in Memphis. Here’s what got lost in the shuffle.

“When #blacklivesmatter is a controversial statement; when our black male students have a one in three chance of facing jail time; when kids in Memphis raised in the bottom fifth of the socioeconomic bracket have a 2.6 percent chance of climbing to the top fifth — our walking students home does not fix that, either.” —Carl Schneider

I think traditional public schools are the backbone of democracy. My child attends a charter school. Let’s talk.

“It was a complicated choice to make. The dialogue around school choice in Nashville, though, doesn’t often include much nuance — or many voices of parents like me.” —Aidan Hoyal

I grew up near Charlottesville and got a misleading education about Civil War history. Students deserve better.

“In my classroom discussions, the impetus for the Civil War was resigned to a debate over the balance of power between federal and state governments. Slavery was taught as a footnote to the cause of the war.” —Laura Faith Kebede

Weekend Reads

Need classroom decor inspiration? These educators have got you covered.

This school year, students will spend about 1,000 hours in school —making their classrooms a huge part of their learning experience.

We’re recognizing educators who’ve poured on the pizazz to make students feel welcome. From a 9th-grade “forensics lab” decked out in caution tape to a classroom stage complete with lights to get first graders pumped about public speaking, these crafty teachers have gone above and beyond to create great spaces.

Got a classroom of your own to show off? Know someone that should be on this list? Let us know!

Jaclyn Flores, First Grade Dual Language, Rochester, New York
“Having a classroom that is bright, cheerful, organized and inviting allows my students to feel pride in their classroom as well as feel welcome. My students look forward to standing on the stage to share or sitting on special chairs to dive into their learning. This space is a safe place for my students and we take pride in what it has become.”

Jasmine, Pre-K, Las Vegas, Nevada
“My classroom environment helps my students because providing calming colors and a home-like space makes them feel more comfortable in the classroom and ready to learn as first-time students!”

 

Oneika Osborne, 10th Grade Reading, Miami Southridge Senior High School, Miami, Florida
“My classroom environment invites all of my students to constantly be in a state of celebration and self-empowerment at all points of the learning process. With inspirational quotes, culturally relevant images, and an explosion of color, my classroom sets the tone for the day every single day as soon as we walk in. It is one of optimism, power, and of course glitter.”

Kristen Poindexter, Kindergarten, Spring Mill Elementary School, Indianapolis, Indiana
“I try very hard to make my classroom a place where memorable experiences happen. I use songs, finger plays, movement, and interactive activities to help cement concepts in their minds. It makes my teacher heart so happy when past students walk by my classroom and start their sentence with, “Remember when we…?”. We recently transformed our classroom into a Mad Science Lab where we investigated more about our 5 Senses.”

 

Brittany, 9th Grade Biology, Dallas, Texas
“I love my classroom environment because I teach Biology, it’s easy to relate every topic back to Forensics and real-life investigations! Mystery always gets the students going!”

 

Ms. Heaton, First Grade, Westampton, New Jersey
“As an educator, it is my goal to create a classroom environment that is positive and welcoming for students. I wanted to create a learning environment where students feel comfortable and in return stimulates student learning. A classroom is a second home for students so I wanted to ensure that the space was bright, friendly, and organized for the students to be able to use each and every day.”

D’Essence Grant, 8th Grade ELA, KIPP Houston, Houston, Texas
“Intentionally decorating my classroom was my first act of showing my students I care about them. I pride myself on building relationships with my students and them knowing I care about them inside and outside of the classroom. Taking the time to make the classroom meaningful and creative as well building a safe place for our community helps establish an effective classroom setting.”

 

Jayme Wiertzema, Elementary Art, Worthington, Minnesota
“I’m looking forward to having a CLASSROOM this year. The past two years I have taught from a cart and this year my amazing school district allowed me to have a classroom in our school that is busting at the seams! I’m so excited to use my classroom environment to inspire creativity in my students, get to know them and learn from their amazing imaginations in art class!”

 

Melissa Vecchio, 4th Grade, Queens, New York
“Since so much of a student’s time is spent inside their classroom, the environment should be neat, organized, easy to move around in but most of all positive. I love to use a theme to reinforce great behavior. I always give the students a choice in helping to design bulletin boards and desk arrangements. When they are involved they take pride in the classroom, and enjoy being there.”