Why the 2014 State Audit Report on JCPS Is a Fraud: Part 1 of 6

This is the first of six posts about the state audit of JCPS conducted in 2013-14, released in May of 2014.  

The year-old audit report of Jefferson County Public Schools by Kentucky Auditor of Public Accounts Adam Edelen continues to be highlighted as the blueprint for progress. It is not.

It was instead a compilation of selective, manipulated, outdated data that served as a convenient vehicle for attacking the school board, school administrators and those who work in school-support roles in central office. It drew many of its findings and recommendations from previous works.

There’s an endless-seeming list of things that have continued to puzzle me about where this state audit came from, how it was conducted and how it continues to affect key decisions and discussions about public education in our community.

The Greater Louisville Inc. event May 21 marking the one-year anniversary of the audit’s release reinforced my disappointment that we allow this information to define the state of affairs at JCPS. It was a key issue in three school board elections and its influence can regularly be seen in the operations of the JCPS Board and administration.

Why did we do it? Two years ago, the school board voted to invite the state auditor in and to pay up to $125,000 of JCPS money for the work. As a sitting Board member at the time, I was told that he was coming anyway, and it would be best to invite him in rather than risk the criticism for not doing so. The auditor had responded to complaints of unethical or illegal acts in several other school districts, but there had been no formal complaints about JCPS. Why was he coming anyway? I can only guess. I voted against commissioning the audit.

JCPS had already been the subject of major audits right around Dr. Donna Hargens’ arrival, which preceded major streamlining and reorganization of central office and school support. The guiding report at that time was the 2012 Phi Delta Kappa (PDK) Curriculum Management Audit and Organizational Review. Many school districts of all sizes had used the same group, including Wake County in North Carolina where Dr. Hargens had come from.

Also as the state auditor came to JCPS, the district was awarded a five-year accreditation from AdvancED, the entity endorsed by the Kentucky Department of Education for that purpose. That designation came after an intense, months-long review, as well.

AdvancED praised the superintendent and the JCPS Strategic Plan Vision 2015 saying it was “targeted appropriately on topics and issues that will help the system improve overall performance.”

In addition to these special reports, JCPS undergoes annual external financial audits (currently done by Strothman and Co.) as required by state law. While these audits point out weaknesses, which contribute to continuous improvement, the audits have determined financial statements are accurate and meet standards.

In fact, the external audit firm points out that JCPS has been awarded the Certificate of Achievement for Excellence in Financial Reporting each year since 2007 from the Government Finance Officers Assn., and notes that this is “the highest form of recognition in the area of governmental accounting and financial reporting, and its attainment represents a significant accomplishment of the District.”

New Audit; Old Information

The state audit used outdated financial data to slam JCPS.

Auditor Edelen’s Finding #1 was that JCPS doesn’t compare itself with a “static” group of peers for benchmarking purposes. The state audit then recommended districts for regular comparison and used them for Finding #2 which said JCPS ranks low in comparison to those districts with regard to spending on classroom instructional support.

The financial information he used for the 2014 state audit was from 2010-11, even though by 2012-2013 JCPS had implemented a major reorganization that cut central office expenditures and sent more resources to schools.

These issues had already been the focus of the PDK audit and changes had been made, but Edelen’s office reached back for financial data from before that time and wrote a lead for its news release that was four years old, calling JCPS a “bloated bureaucracy.”

No business would judge its performance on outdated financial information.

In fact, JCPS responded less than a month after the release of the audit explaining: One of our leading indicators from our strategic plan adopted May 2012 is to increase the percentage of spending on items for schools… Over the past three years, we have increased our direct support to schools. In FY’11 we allocated $653.6 million to schools out of the General Fund. In FY’14 our budget allocated $735.7 million.

In other words, at the time the state audit had been commissioned, JCPS had already significantly rerouted resources to schools.

The 2012 PDK audit was tough on central office structure and recommended a review of funding for instruction. Much of that was accomplished fairly quickly, impacting the budget within a year, as noted below.

JPEG Central Operations Expenditures Graph

Classroom Instruction Costs

School Allocations

Here are some changes ignored by the state audit and documented in the media prior to his arrival:

  • JCPS Can Improve, Audit Says 24 2012 – The Courier-Journal
  • School Auditors Recommend Changes in Curriculum, Instruction 23, 2012 – The Courier Journal
  • JCPS Freezes Some Salaries June 26, 2012 – The Courier-Journal
  • JCPS Reorganization Eliminates Dozens of Jobs, Saves $4 Million July 1, 2012- The Courier-Journal

These obvious, publicly-known steps, were ignored by the state audit.

Part 2 Coming Tomorrow:

  • State Audit: Benchmarking is a Sometimes Thing
  • Warehouse Recommendation: Finding Without Foundation

Reports Referred to in these Posts:

2014 State Audit Report

http://www.jcpsky.net/News/TempNews/AuditReport2014.pdf

Phi Delta Kappa Curriculum Management Audit

http://www.jcpsky.net/Projects/CMA/JCPS_Audit.pdf

Phi Delta Kappa Organizational Review

http://www.jcpsky.net/Superintendent/Org_Review_Study.pdf

 

About Debbie Wesslund

I served on the Jefferson County Board of Education, Louisville, KY, from 2007-2014 and continue to be an advocate for public schools. There’s a high-level dialogue about public education that swings from positive to negative, with many who seek the spotlight voicing an inaccurate picture of our public schools. Words matter. They get lodged in our public perceptions, creating a narrative that doesn’t reflect the real story. There’s so much more to public education, and much worth applauding in Kentucky and across the country. The stakes are high: public education is the most serious public business we are about as a community, a state and a nation. We must continually renew our resolve to support public education. There’s always more promise in building something up, than in tearing it down.
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2 Responses to Why the 2014 State Audit Report on JCPS Is a Fraud: Part 1 of 6

  1. JCPS Employee says:

    Thanks for what you do, Debbie. You were a fine board member, and I was glad to vote for you three times. I’m curious to see the upcoming series.

  2. Retired JCPS employee says:

    Thank you for standing up and being an advocate for Jefferson County Public Schools. Our schools and students need more people like you.

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