Tucson Unified School District Governing Board member Mark Stegeman, PhD, says that former Deputy Superintendent Yousef Awwad’s projected budget shortfall, and the apparent financial mismanagement that led into it, have precipitated much discussion. However the public discussion of the matter requested by Board member Michael Hicks is being blocked by Board president Adelita Grijalva.
Hicks had requested a emergency board meeting on the matter, but Sanchez and Grijalva are claiming that the Board’s Agenda Committee make the determination as to whether the matter will get a public airing.
In the mean time, Stegeman advised constituents in a newsletter last week, that the “superintendent and board president have argued that Awwad’s enrollment projection of 2,176 students lost in 2015-16 is a worst case scenario,” but “those statements have been a mystery, because that was not Awwad’s assumption..”
According to Stegeman, after reviewing a spreadsheet prepared by Awaad, he “finally figured out where they may have got that number.” He argues that the 2,176 “is exactly the projected difference between regular ADM and enrollment in 2015-16, but that is completely different from the year-over-year change in enrollment! Maybe they just misread the spreadsheet.”
Stegeman notes that Sanchez and Grijalva’s failure to be able to read a spreadsheet is “why I have more confidence in Awwad’s original assessment of the situation.”
Stegeman summarizes the main facts in his newsletter:
* TUSD had over $14 million in cash reserves at the end of FY 2013;
* Even after accounting for those reserves, Awwad is projecting that TUSD will have barely have enough cash to get through June. He expects that TUSD is not actually spending money at the budgeted rate, partly because of unfilled vacancies, but if it is spending at the budgeted rate then he recommends midyear budget cuts including a hiring freeze no later than January 1.
* As of last week there had been no new information, for months, that would adversely affect TUSD’s revenue outlook. In other words, leadership should have been understood the situation since last spring. Awwad wrote that he and the CFO sent warnings to the superintendent as early as March.
* District leadership has pointed out that Awwad’s projections exclude many of TUSD’s funding streams, but almost all of those funding streams (e.g., federal funding through Titles I-V, federal funding for special education, JTED revenues, fees from community schools, Medicaid reimbursement, Proposition 301 performance pay, tax credit funds, taxes collected for bond repayments) are dedicated to specific purposes and unavailable for closing any budget shortfall.
“District leadership has spoken of election-related motives, but Awwad is (as far as I know) not running for office,” writes Stegeman. “If TUSD had been forthcoming about the situation months ago, then it would not be popping up shortly before the election.”
“District leadership has also pointed out, correctly, that all projections include uncertainties,” continues Stegmen. “That is why rational organizations plan ahead and maintain reserves and contingency plans, instead of building overspending into the budget and then being forced to consider difficult cuts or freezes a few months later.”
“Though it seems clear that TUSD is running an operating deficit (and I trust Awwad’s original analysis), the rate of overspending is hard to determine precisely. I spent several hours yesterday going over the district’s books (public records) and could not get a clear answer. This is partly because TUSD has not yet closed its books for FY 2014, partly because staff has already acknowledged that there are errors in the posted budget book for FY 2015 (which should be corrected this month), and partly because the entries for some funds are hard to understand. Arizona school districts generally use cash-basis rather than accrual accounting, mostly because of state regulations, and that makes it harder (at least for me) to decipher the district’s true income or deficit,” concludes Stegeman, an Economics professor at the University of Arizona.