Audit shows budget errors and omissions at D150

Holy Toledo. I don’t generally read the Peoria Story blog, but Billy Dennis quoted a portion of this post, and it was so shocking I had to read more.

I’ve read past District 150 audit reports (available here*), and they’ve always been bad — bad enough that it makes me wonder why in the world Guy Cahill is still employed by the district. For example, here’s a note from the June 30, 2007 audit report:

In an ideal control setting, the District would have personnel possessing a thorough understanding of applicable generally accepted accounting principles staying abreast of recent accounting developments. Such personnel would perform a comprehensive review procedure to ensure that in the preparation of its annual financial statements that such statements, including disclosures, are complete and accurate.

And this:

The overall internal controls over the District’s accounting system are not adequate to ensure that misstatements caused by error or fraud, in amounts that would be material to the financial statements, may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions.

That was the second year in a row the district got that last note. The 2006-07 audit was also the one that reported the district’s misallocation of over a half million dollars in Title I funds. But evidently the latest audit report takes the cake:

“The November 14, 2008 audit report, prepared by Clifton Gunderson LLP, for the 2007-08 school year, shows the District #150 administrators failed to budget $10,410,849 when budgeting for Teachers Retirement Service (TRS) pension contributions. […]

“This was not a new expense – the district has been budgeting for “on-behalf of” contributions to TRS for years. Their actual expenditure for this item during the 2006-07 school year was $7,264,468. How did they “forget” to budget over $10 million in expenditures – and revenue – for the 2007-08 school year?

“Further, how and why did the TRS provision grow over $3 million in one year? Did teacher salaries increase so much in one year that 10% of that increase amounted to $3 million?

Since the revenues and expenses for “on-behalf of” contributions to TRS effectively cancel each other out, the issue is more about transparency than anything else. If the public were to see that this fund grew by over 43% in one year, they might start asking questions — like, “why is that amount rising so dramatically?” and “what other information is the district hiding?” With omissions this great, how can we believe anything the school administration says about the budget and the need to close a high school? Incidentally, the “on-behalf-of” contributions are not on the 2008-09 budget that was submitted to the Illinois State Board of Education (ISBE), either.

Something I’ve always wondered is how District 150 can keep sending incomplete reports to the Illinois State Board of Education (ISBE). For instance, the last three years (2006-2008) of the district’s Annual Statement of Affairs (available here*) leaves required information completely blank, including salary schedules and non-salary payments over $2500. It is required by the State that the district report this information, and yet it hasn’t for multiple years, keeping taxpayers (and the State regulating agency itself) in the dark. With as many administrators and consultants as District 150 has, surely someone could be tasked with completing required reports.

These questions deserve answers. The information reported on Peoria Story has been forwarded to District officials. It will be interesting to hear their response.

*Note: If you want to look up the financial data or Statement of Affairs reports on the ISBE website, they’re listed by the district’s code number, which is 48-072-1500-25.

91 thoughts on “Audit shows budget errors and omissions at D150”

  1. The administration has to go…

    Diane… you have begun to see the light!

    Now, if you can just realize there is no better administration “out there”. It is a systemic problem, not a problem of personalities.

  2. Naaaaaahhh, don’t give up yet, you are so close.

    We just need to quit thinking some bureaucracy is going to solve our problems for us. Give the administrative authority to the principals, where it belongs and get rid of the layer of immune autocratic incompetence called the School District. We have a ROE to handle Statewide stuff… what the heck are they doing anyway… they sure have been quiet the past couple of years.

  3. When the principals have authority, they can not escape or hide from accountability to the parents. and community.

  4. Frustrated: I agree whole heartedly with your comments about parental involvement. In fact, I wrote much the same thing to the board when the Manual Restructuring plan was first made available–it has a parental responsibility component that parents are supposed to fulfill if their students “want” to go to Manual. I asked (and asked Mary Spangler in a face to face conversation) what will happen to the parents and their students when the parents (or students) don’t comply. There is no point in making these requirements without making clear what the consequences are–and, of course, at Manual there are no consequences.
    Also, I believe that in the schools where discipline is needed the most, the principals chosen have a more permissive attitude about student behavior–and more often than not they blame student behavior on teachers. The favorite phrase coming from more than one Manual administrator or dean was that students would behave if teachers would engage them. So when young people are out in public, on the streets, etc., who is supposed to engage them so that they will behave? At some point, self-discipline has to be expected–and we should have that expectation of high school aged kids. Is it good for young people to be taught that their behavior should be dependent on the behavior of others–if they have a teacher they don’t like, etc., should their acting out behaviors be excused? That is what happens in District 150–at least, in places where I have had experience.

  5. Sharon:

    “Frankly, to be an expert in education, I think a person really has to have extensive classroom experience–to observe first hand the learning process of young people.”

    I respectfully, but wholeheartedly disagree. That’s like saying the CEO of GE needs to know how to put together a lamp. And, so you know, my wife is a teacher and I totally respect the time you put in the classroom, but the bias is off-base here.

    If (not implying you don’t) you read the literature on good management and leadership its fairly clear that those who lead successful organizations actually lead their organizations. If it’s true that Hinton (I will repeat the “not the problem” assessment) is truly running around putting out the fires the nincompoops around him create, then he is not leading the organization.

    When one leads a unit, you hire competent, technical experts. Would you really want your superintendent establishing classroom teaching/learning standards? How could he/she? Running an organization involves budgeting, finance, environmental scanning, personnel, contract management, policy analysis, etc.

    Planning, organizing, staffing, directing, coordinating, reporting, and budgeting. These are the functions of management. Classic administrative theory stuff.

    Good managers hire good people and then measure good results. I think where this organization is having problems is in this area, Hinton is not allowed to lead as evidenced by the continued cycle of reactionary policy development.

  6. ed: Exactly — that is the standard MO in Peoria —- ‘continued cycle of reactionary policy development.’ No clear vision from stakeholders, zero accountability, zero or little consistent enforcement, low levels of trust accompanied by high levels of resentment and confusion. In the private sector, this school ‘business’ would have already gone bankrupt.

  7. ed I agree with everything you say up to your last sentence. Replace the words “not allowed to” with “is unable to”….

  8. hi diane,

    could be. i venture both are applicable. organizations can be tough nuts to crack; so much positional posturing and turf control.

    someone wrote that the best thing the district could do would be to hire a change agent. i agree whole-heartedly (sp?)…

    bring someone in, give them a two or three year (max) contract, and tell ’em to “go to town” fire, hire, engage, change.

  9. Ed: I am willing to agree that 150 or educational institutions need expert managers, etc. However, I’m not sure that the Type 75 certificates issued provide or require that level of instruction. I could be wrong; I’ll listen to what others say. Also, paying attention only to the bottom line, doesn’t always lead to sound educational decisions.

  10. We do NOT need managers! We do NOT need bureaucrats. We need educators.

    Parents and teachers will manage the education process, principals will manage the administration, and students will manage to survive it all.

    There should be NO principal (or administrator if you insist on having a Wisconsin Office) that has not taught in the past 5 years. Get that? Any principal that has been in a position of administration for 5 years MUST go back into the classroom for at least a year before going back to being a principal. If they can not teach, then they must be a teacher’s aide or helper.

    The schools have to be about and for the students.

  11. Two sorts of people go into education. Those who really really passionately love it and those who can’t make it otherwise in the Big Business world. If you are a ‘C’ student in Engineering, your job prospects are pretty bleak in the engineering profession. Get a teacher certificate and ‘bam’… you are a science teacher. Same thing works its way up when dealing with administrators.

    Realize too, that school districts are competing with the business world for the same people. Good teachers make good employees. Money talks. The best and brightest generally don’t end up in teaching. It doesn’t pay. Same thing holds for administrators. Piss n moan about the salaries that some of these people are making, but you really need to look at what a comparable supervisory role in the business world would pay. You get what you pay for. That said… accountability is VERY important. You don’t pay out good money for mediocrity.

    Now I see two themes emerging. The accountability theme and the oh we spend too much theme. I fully agree with the first. The second… well it is a long established political point of conservatives to try and absolutely minimize any spending on education… especially if its not their schools. Starving the beast… for some the objective is to destroy public education in favor of private (vouchers or not).

    The State of Illinois slashed state level spending on education in 2008 and in previous years. Granted we have some budget problems caused by the Blago vs Madigan feud. Curiously you hear little local outrage over those cuts. I am not surprised. The conservatives are happy about that. It is troubling with those cuts, that there are calls to slash even further, locally.

    Throw in the budget shenanigans of the school board, meddling by the Chamber of Commerce, and Hinton’s unfocused incompetence and we have an immensely complicated mess. I firmly believe that there is a well connected component in this city who want District 150 to remain and or be perceived as a basket case. They benefit politically and or financially from the Heart of Peoria remaining dysfunctional.

  12. Kcdad: We do agree! I do believe there is a difference in a GE CEO not being able to put a lamp together (although I don’t think it would hurt) and a principal that does not understand from experience (or is not willing to listen to classroom experts) the problems in the classroom. To put a lamp together, just follow the instructions–the instructions don’t vary from lamp to lamp. The instruction manual for teaching children is just a bit more complicated.

  13. Kcdad… In my old highschool and even K-8 school, the principal did indeed teach. It was one or two classes tops cause he still had his administrative responsibilities. Those guys embraced the continued classroom experience and considered it important to their perspective as administrators. It wasn’t a once every 5 year sort of thing. It was every year!. So I agree with that point in principle.

  14. Mahkno: You covered considerable territory–but I could find little, if anything, with which to disagree.

  15. Throw out another point…. many who have recruiting or HR experience for highly skilled professions … ok I will go out on a limb and say most would probably concur that we do not spend nearly enough on education. Corporate leadership has been very remiss in pushing for reform in education funding. Some companies have voiced their concerns and have been punished for it. You get the conservatives crying foul about their concerns of increasing funding… which means increasing taxes. You get some liberal elements who then look at you and say… pony up, expecting you to pay up a ‘disproportionate’ share.

    Tangent… Everyone wants to beat on the Dist 150 horse. There are two other BIG issues that MUST be tackled concurrently. You cannot fix District 150 and NOT deal with these other two issues.

    One, CRIME. While crime rates did go down overall in 2008, statistically (versus other communities in IL) and in the eyes of people who live here Peoria’s crime rate is still much too high. Our police are understaffed and therefore under funded. I know the police chief says its alright. His job is to make do with what he has and be positive about it. His job isn’t to set public policy. That is our job as voters. If you look at the # of officers versus the population and geographic area, we have far far fewer officers today than 20, 30, 50, 100 years ago. Gangs are thriving… it needs to be dealt with much more broadly.

    Two ECONOMIC development. Peoria has a Heart of Peoria plan. It in principle embraced New Urbanism. But where are the jobs? Where is the economic development to bring jobs to the older parts of Peoria? Why are we building new retail locations on the periphery? Why do we have businesses relocating to the periphery? Don’t cite District 150 and Crime… yeah we know that. That is my point you MUST address ALL THREE AT THE SAME TIME.

    So those of you will all the harsh criticisms and solutions for District 150… Where is your plan to tackle crime? Where is your support for the Heart of Peoria plan and or your alternate economic development plan?

  16. kcdad,

    i’m curious to understand how classroom teaching translates to managing a $160 million budget?

    Believe it or not, it is possible to implement and manage mission separately. I agree one managing mission must understand issues of implementation, but don’t agree it necessarily works the other way by default.

  17. Mahkno: One way to support of the Heart of Peoria plan would be to vote NO on the sales tax referendum to build the museum as currently designed/planned. That plan will not create economic development in an urban area because it is not the correct plan.

  18. Sharon and Kcdad,

    You both speak of principals and their duties. I’m speaking of those running the district and reporting directly to the board. You know, the statutory structure of local district governance 🙂

  19. New topic – just spent the last half hour on hold with Comcast – they can’t find anything in their computers about the rebroadcast of last night’s BOE meeting either on Ch. 17 or 22. Anyone have that info?

  20. Just checked the district’s web site and have copied the following info (should have checked there after Comcast):

    “Feb. 2nd BOE Meeting to be Replayed on Comcast Ch. 17 Tonight”

    “The February 2nd, Board of Education Meeting will be re-played, with audio, tonight (Tuesday, February 3, 2009) at 6:30pm on Comcast channel 17.”

    “Peoria Public Schools apologizes for the technical difficulties during Monday night’s live broadcast and is working with the cable provider to prevent future problems.”

  21. Waaayyy off topic here…..Yesterday, I saw Ryan Spain getting into his car. On the back was an oversized “Build The Block” bumper sticker/magnet.

    Am I the only one who thinks that is improper? I’m not even sure that improper is the right way to describe it, but it kind of ticked me off.

  22. Mazr, what in the world do you think is improper about that? ? ? Doesn’t Councilman Spain have the right to an opinion, and doesn’t he have the right to express that opinion. This is Amercia after all. Won’t you expect that this will be one of the questions asked every person running for the Peoria City Council and each of them will have to take a position, as well as the Mayoral candidates. The Museum Group folks were handing out those magnetic bumper stickers at the Mayor’s State of the City address, perhaps you ought to do some undercover investigative reporting and check out the cars of the other Council members, perhaps Councilman Spain is not the only one willing to express his support for Building the Block.

  23. Yeah, that is a bit of a bogus charge. Now, if he were driving a city vehicle, that would be in poor taste, but he has every right to express his support.

  24. It is out of the city council’s hands. It’s up to the voters of Peoria County at this point.
    I will be voting yes by the way.

  25. Well. At least this proves something I have believed all along…..,
    Spain is as clueless and spineless as most of the other local politicians around here.

    Oh well. Hey! If the museum is going to be raking in the big bucks ‘they’ say it is, what percentage of that $7-14 million a year will go to District 150?

    I am sure that Peoriafan and the hand full of mis-informed Peorian’s who are voting YES, will make the vote interesting. At least the PRM won’t think EVERYONE in Peoria thought it a terrible idea.

    Now.
    If you will excuse me, I am going to take my ‘Bilk The Block’ sponge toy and go home.

  26. Ileriet, my post wasn’t an attack on Spain. If I would have seen Manning or Nichting or Spears or Ardis I would have asked the same question.

    I know he’s entitled to his opinion, but it still ticks me off. It’s like he’s in the pocket of the “Build the Block” gang. JMHO.

  27. Peoriafan,
    Well informed? Just how “well informed” can you be? The J. Star editorial written by Janet Lord [concerned citizen] speaks volumes. The PRM has been throwing numbers around like crazy. They have manipulated and fudged the data to serve their own ends since this project began.

    So tell me, which set of ‘figures’ has the PRM thrown at the ‘public’ has YOU so well informed?

  28. We all have a right to vote yes or no on the sales tax referendum, elected officials included. We should treat each other with respect to understand each other’s point of view.

    Peoriafan: I have heard some of the information which has been presented. You have too as you shared that you are well-informed. If you would be willing to share, from your vantage point, why should a taxpayer vote yes?

  29. Given the stimulus plan’s increasingly uncertain fate and form, the Board waiting on it is akin to waiting for Godot.

    I admire the Board’s optimism so much, however, that I’m taking a page from its book and not paying my bills this month because I’m sure I’m going to wake up in the Land of Gumdrops and Rainbows with Miss USA at the door delivering my mortgage payment and a double-meat pizza.

  30. LOL – nontimendum – you said it perfectly! Why the blind followers of BO think his magic pot of printed money is going ONLY TO THEIR special interest group amazes me. Could it be that Gorenz/Hinton realized that the villagers storming up the street to 3202 Wisconsin with pitchforks and torches weren’t coming for a friendly weenie roast and they better act like the calvary was coming like in an old western movie to save their sorry butts?

    Meanwhile, back at the ranch, Cahill, tied to the stake with his phony paper budget at his feet was….

  31. Where has Mary Spangler been for the last twenty years that she doesn’t know gangs have infiltrated our schools? How long has she been a board member? All she had to do was talk to a couple of principals or visit the schools or take a ride south of Glen Ave. How can someone this uninformed about our city be making important decisions about our schools. She should voluntarily remove herself from the board and get a reality check.

  32. Yeah Ed, we know what you are talking about.. maintaining the same failings systems we have had for 50 years.

    What is the principal’s duties? How does a high school principal differ from a district superintendent? (Besides the obvious: a principal theoretically does something that contributes to the education of children)

    How big a budget does the average high school and its feeder schools have? (How much easier would it be to manage and plan educational programming if schools were managed in this satellite system?) Rather than meaningless district figures, wouldn’t it be nice to actually see budget numbers and educational figures from schools where there can be some accountability?

    What exactly does the school board do? (Other than rubber stamp whatever the Wisconsin office suggests?) What are their qualifications for doing that?

    These are issues that most of us have no clue to their answers. We just presume that this bureaucracy works in the best interest of our children… well some of us do. Some of us realize they exist only to maintain their leeching grasp of their place at public trough.

  33. “Believe it or not, it is possible to implement and manage mission separately. I agree one managing mission must understand issues of implementation, but don’t agree it necessarily works the other way by default.”

    This a great example of corporate, political double speak. Were it possible in this district, it would be done. It is not done, therefor, it is not possible.

    Or are you suggesting that our administrators intentionally don’ t want to?

    I love the buzz words: Mission… oooh nice one.

  34. Can anyone really convincingly argue that the district finances are NOT ****ed up? I’m not sure even the CFO or central Admin understands their own budget. The decision to halt school closures was the correct one. They simply cannot make such rash moves based on flawed, questionable or incorrect data.

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