Budget shenanigans alert: $384K of OVER-expenditures identified

Instead of an Annual Meeting Book
or a  150 pg Monitoring Report, how
about each resident gets a copy of this?

We knew it was too good to be true.
We saw at least $700K in surplus, Phil Frei kept saying only $200-400K.
Ah...but he controls the purse strings, so he knew.  He knew.
The questions are, however: did his supervisor, Tim Culver know? Why didn't the school board know?

Budget Shenanigans#1: $300K over-expenditure for textbooks
District administration had to know these were coming.  So why weren't they budgeted for?
Or did Mr. Frei know that there would be a surplus to cover the shortfall in these budget lines?


Budget Shenanigans#2: Who knew? And why wasn't it reported?

District administration certainly, without a doubt knew they needed to purchase these textbooks; they'd been meeting on the issue through 2011.  It is our understanding that when board members asked if there was money in the respective department budgets for these materials, administration indicated affirmative.  Clearly that is not the case.  So where did they think this money was coming from?  Fund Balance?  Budget surplus, hmmm?
Why was this not reported as part of the March budget adjustments?  Did Tim Culver know about/approve this?

Budget Shenanigans#3: Robbing Peter to pay Paul
Clearly, the intent was to purchase $300K of textbooks required for the 2012-13 school year using projected surplus dollars from the 2011-12 budget.  This is not appropriate.  Budgets are budgets. Any budget surplus belongs to the taxpayers, NOT district administration.  Could they ASK nicely (via the school board) if the taxpayers would be so kind as to allow surplus dollars be used to pay for next years expenses?  Sure.  And likely it would be approved.  But that's not what was done here.  The manner in which this was handled is questionable at best and subject to repercussions at worst.

The question that this brings, however, is what OTHER budget hijinx is going on that we have NOT yet discovered? It brings to mind the old adage that if one would steal a candy bar, it establishes that the individual has thieving tendencies, which leads one to question: what else will be (or has been) stolen...and when.


Budget Shenanigans#4: Money Manipulation 101
How can any budget manager, in good conscience, DECREASE the amount budgeted for a specified line item when expenditures for that line item already exceed the budgeted amount?  Because that's what happened for line 471, Textbooks.  The "budget" in March 2012 was $70,173, which was reduced to $66,814 in April 2012, the same month in which the budget was not just exceeded, but shattered by $161,500?   More to the point, the budgeted amount even in December 2001 was $186,003.  Why was it reduced by $120K when Mr. Frei KNEW these purchases were coming?

Wait...why are we even adjusting budgeted amounts on a monthly basis?  Hello...McFly!  A budgeted is a fixed amount by which one's spending is constrained.  If one simply moves the target every month, it defeats the purposes of even having a budget!  This little known trickery has got to stop.

In an attempt to rationalize this practice, Mr. Frei has used an analogy that a teacher might in the spring decide they want top purchase a magazine, but come fall, decide they no longer want the magazine and instead want to buy construction paper.  Therefore Mr. Frei decreases the magazine budget and increases the paper budget. NO!  What happens is that one line item will be a little short and the other will be a little high.  But they balance each other out in the end! So no harm, no foul.   Changing the budgeted amounts just muddies the water.  Of course, sometimes we muddy the water when we don't want people to see what we're doing.

Budget Shenanigans#5: Disingenuous Information
The value "FYTD %" on the monthly Expenditure by Object report is disingenuous at best. It ONLY reflects actual expenditures vs. budgeted amount. This value MUST also include encumbrances, which are financial commitments the district has made. School board members and residents who look at this stuff will generally simply scan the FYTD% column and look for anomalies. The April report shows that we've only spent 64.69% of budget for line 479 "Other Instructional Books", which at a glance, seems like we will have a surplus with only 2 months remaining. Only if you look at the Unencumbered balance and recognize that -133K represents a budget exceedance would you catch it. And it appears near the bottom on page 2 of a 3 page report.

Budget Shenanigans#6: These Are Not The Only Ones
Take a look at budget line items 440 (Non-Cap Equipment) and 550 (Equip. Addition) as we are now $57K and $27K over budget respectively for these lines (roughly 8%). Was the board made aware of this? What did we purchase that required us to exceed budget for these lines?

Eroding the Public Trust

Really!  What if you needed to pass
a referendum for a new school now?
Does anyone really trust the information
coming out of 500 S. Bird St.?

 It is incidents such as this that continue to erode the public trust in the district as good stewards of taxpayer money. People are hurting, and a surplus used to lower the levy for 2012-13 would have been very nice. Instead, it continues to look like the district wants to squeeze and spend every single taxpayer dollar even using questionable means.

District Leaving the School Board with Egg on their Faces
 The quality and shadiness of data coming out of the district is unacceptable, and these things also make the board look either ignorant or complicit. We don't believe either is true...we know how much information there is and how hard it is to peel all the layers of this onion. However, the district has placed all board members in a very bad position.