Today’s stunning Dallas Morning News story reveals that Dallas ISD overspent its 2007-08 budget by $64 million and, worse, nobody realized it until just now. The district would be bankrupt were it not for its reserve, which is down to $56 million – half of what a district its size should have.
Predictably, the leaders of the district’s finance department refused to comment. The article indicates these folks, who had been responsible for watching the dollars and sense, had been telling the Board and taxpayers everything was hunky dory. Hence, the district just completed hiring another 750 teachers to reduce class size – even though as it turns out it could hardly afford that many.
Now, the finance department is being “restructured” and the district is desperately searching for places to cut millions of spending. Another possible consequence that the article does not mention is a lowering of the district’s bond rating, which would significantly increase the interest cost associated with building and renovating facilities.
Meanwhile, education activist Donna Garner reminds us that former DISD superintendent Mike Moses, who left some kind of mess for current superintendent Michael Hinojosa, departed with a severance of $480,500 and “earns” $224,000 a year from the state’s educator retirement system.
This is also the same district that recently went through a scandal of credit cards being misused for employees’ personal purchases that involved some $8 million of taxpayer dollars being diverted from educating kids.
Can you imagine if DISD was a publicly traded company? Now, under Sarbanes-Oxley, the CEO has to sign financial statements to verify their accuracy and can go to prison if the books are cooked. Instead of reshuffling the deck chairs in their finance department, DISD should outsource their financial management to a major independent accounting firm that will not be afraid, and in fact is obligated, to deliver bad news before it hits the fan.
Here’s today’s shocking DMN article on this: