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Detroit Schools to hire auditor
Spending errors cause Burnley to add staff member to oversee
purchase program.
by Jodi S. Cohen, The Detroit
News, December 5, 2002
For more articles visit
www.bridges4kids.org.
Instruction increases
Detroit Public Schools chief executive Kenneth Burnley
said he has dedicated more money to instruction-related
expenses. The percentage of the budget spent on classroom
activities:
1999-2000 59.5%
2000-01 63.3%
2001-02 64.1%
Source: Detroit Public Schools
Detroit Public Schools plans to hire a senior staff-level
auditor general to oversee spending after a year-end financial
review found irregularities in the use of purchasing cards.
Schools chief executive Kenneth Burnley also said Wednesday
that an outside accounting firm will start sporadic audits of
individual school buildings. He had previously said schools
would get audited every two years, but that hasn't
materialized despite finding millions of dollars missing or
misspent in the first reviews of high schools two years ago.
"We do have some internal control issues to address," said
Burnley, who said he wouldn't release details of the
purchasing card problems until today. "From time to time, we
have people who aren't doing what they should be doing."
Burnley also said there were plans to hire more staff in the
accounting office to better monitor the use of the purchasing
credit cards, given to central office administrators, school
principals, engineers and custodians to buy supplies.
The purchasing program started about three years ago, and
there are currently two staff members who monitor expense
reimbursements related to the cards. "We do not have enough
people to properly manage it," Burnley said.
The district also announced Wednesday that it is in stable
financial condition after increasing its fund balance, or
rainy-day fund, from $23 million in the 2000-01 fiscal year to
$62 million at the end of the 2001-02 fiscal year.
The total balance is $103 million, including money set aside
for unpaid bills and workers compensation. That's more than
last year's $69 million, but still less then the $104 million
when Burnley arrived in July 2000.
AUDIT
School officials said it is
difficult to compare to previous years because earlier
balances had more money set aside to pay for specific
liabilities such as litigation.
According to the annual financial report, the district spent
$881,685 of its $1.5 billion budget on instruction, an
increase over the past two years.
School officials warned, however, that they may have to dip
into their growing nest egg, and are bracing for possible
mid-year cuts. They are grappling with an $18 million loss in
state aid due to a loss of 3,000 students this year, and could
see more cuts from Lansing in the coming weeks.
They also are unsure about the financial consequences of
losing a recent arbitration case with the administrators'
union.
"It will be tough to maintain, to be honest, as we look to the
future," said Burnley, who didn't rule out possible layoffs in
January. In addition, district officials have given schools
only 80 percent of their budgeted funds, and still aren't sure
if they will get the rest of the money this year.
"It's going to be a really tough year," added deputy chief
executive Bob Moore.
The school district grew its rainy day fund by reducing
inventory and paying bills more quickly.
The school district also has saved money in the food service
area. In the 2000-01 fiscal year, the district spent $4.6
million in general fund money on food service in the 2000-01
fiscal year, but brought in a $2.8 million profit last school
year.
Some of the savings came from layoffs earlier this year of
more than 700 employees, including a third of the district's
custodians. Clerical staff, maintenance workers, assistant
principals and other staff also were laid off. District
officials said Wednesday they didn't know the amount saved by
the layoffs.
While Burnley was pleased about saving more money this past
year, some educators said the consequences have been
troublesome.
"The layoffs have caused other problems. The buildings are not
clean because we don't have enough manpower to do that," said
teacher Lucy Starling of Rosa Parks Middle School. On a visit
to that school this week, roaches scampered out from
underneath tattered carpet in the classrooms.
"We only have three people to clean this whole building," said
Starling, a 33-year veteran of the school system. School staff
members said that two custodians were dismissed last school
year.
Burnley also agrees that there have been repercussions.
"As a result, we don't have the hands to support the schools,"
he said. "It has really hampered the district's ability to
support what is there."
You can reach Jodi S. Cohen at (313) 222-2269 or
jcohen@detnews.com.
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