Why the 2014 State Audit is a Fraud: Part 3 of 6 Governance Findings Arbitrary, Unsupported and Incorrect

This is Part 3 in a 6-part series on the state audit of JCPS conducted in 2013-14 and published in May of 2014.

The state audit includes three findings in the section on Governance that seem to be promoting someone’s predetermined agenda. Auditor Edelen said the Board should do things differently, but did not appear before the Board to explain why or answer any questions.  As in other sections, the findings were unsupported.

  • Finding 8: The Board may benefit from adding “at large” members due to the size and complexity of JCPS.

The state audit admits there is no methodology to determine an optimum number of school board members. I would just say that quality generally trumps quantity, and effective Board team is the key to success.

One of the examples supporting at-large members used in the state audit was a Board member comment that some members spent too much time talking about their own districts. The opposite is true, in my experience. Board members are expected to know and represent their constituency, but also to make decisions that impact the entire district in the most positive way. I never saw an over emphasis on one’s board district at the detriment of the district as a whole.

  • Finding 9: Board members generally do not appear to have a depth of understanding to actively examine or question the budget effectively without significant reliance on JCPS staff.

To get to this major assessment, the auditor’s staff interviewed individual Board members privately. I can tell you that there was not sufficient discussion to assess the level of financial knowledge of board members. We looked at no financial documents.

Also within this finding was the recommendation that the staff give the Board more information. The audit said, “We also recommend that Board members be provided with a budget-to-actual report that can be reviewed regularly so that variances can be known and discussed.”

Board members DO get budget information regularly including monthly budget-to-actual figures for the current year. Board members have access to all regular financial information. There is a very prescribed annual budget timeline that follows state regulation and sound financial practices.

The audit recommends the Board engage in annual training. Kentucky school board members have always been required by state law to receive training, and now must get annual training specifically in finance. The Kentucky School Boards Association has long been the provider of mandated training, and offers excellent financial training tailored to operating and overseeing school budgets.

The Board has a strong record on financial management. With no deficit spending, annual balanced budgets, and nationally-recognized financial accreditations, I would put up the school board’s record (supported by great staff work) against the state legislature and U.S. Congress any day with regard to financial management. By the way, many found it puzzling that the state auditor did not meet with the JCPS Chief Financial Officer.

  • Finding 10: The Board lacks a committee structure to provide detailed oversight of financial and audit matters.

I think that’s a perfectly fine recommendation to review, and it has been reviewed and revised over the years.

There have been committees on various subjects, including finance, but committee or not, there have always been special sessions to review the budget. Currently, the Board utilizes publicly-noticed work sessions for this purpose, where every member can get more detail. Between 8/12/13 and 5/27/14 (roughly the span of the audit work), there were four two-hour sessions on the budget, in addition to regular Board meetings and other meetings on financial matters. And, all seven board members, superintendent, Chief Financial Officer, Director of Accounting, and Director of Internal Audit meet annually with the external auditor to review in detail the financial report of fiscal year end.

Board’s “Mundane” Work

The auditor compiled some additional statements from Board members. I want to refute one in particular which said, “Executive management develops strategies and goals, while the Board deals with mundane details.”

The Board and Superintendent worked together to set goals and create strategies in the Strategic Plan Vision 2015, which is well known in the community. That work was not “mundane,” nor is ANY of the work of any Board of Education.   The Board hires and evaluates the superintendent, approves a budget, sets goals, responds to community concerns, oversees a commitment to diversity, monitors achievement progress… There’s very little mundane work in school district governance. If it bores you, you shouldn’t be on the school board.

School Board Meets Quality Standards

To back up the claim that the JCPS Board should take more time on financial matters, the state audit refers to the 2013 School Board Quality Standards Report, which measured the JCPS school board effectiveness, but left out key information.

The report’s author, Dr. Thomas L. Alsbury, Professor of Educational Leadership at Seattle Pacific University, and co-director of the University Council for Educational Administration and District Governance, watched 21 regular board meetings in 2013. The Board was graded “meets standard” on almost every measure. The ones that were listed as “developing” were for community linkages and time spent on public speakers.

The state auditor claimed that the report indicated more time should be spent on finance. However, this board quality standards report said JCPS “met the benchmark for discussing finances and facilities by taking only 14 percent for these management issues. High performing districts take a small amount of time on these topics (10 percent). He went on to say that, “most boards spend an enormous portion of their meetings on these issues (60 percent), sometimes referred to as the Killer B’s: buildings, books, buses and budget. Boards that spend more time on these management issues tend to preside over lower performing districts.”

The auditor referred to this study in his report, but left out the warning against spending too much time on budgets in board meetings. Instead, Auditor Edelen said the Board should consider taking more time on the budget at meetings, in opposition to this year-long study by Dr. Alsbury, the author of 50 publications on school board and superintendent research.

Public Release of the Audit: Tell Everyone But the Board

The auditor conducted this audit at the request of the Board and was paid by the Board, but did not appear at a public Board meeting to explain his findings. That’s not transparency, that’s disrespect. Why?

The Board – as a whole – got no opportunity to ask any questions of the state auditor, except at a press conference along with reporters. I asked for an opportunity to do this at a Board meeting. There was no response to this request.

By contrast, key representatives from the PDK audit review team in 2011-2012 and AdvancED accreditation team in 2012-2013 interviewed Board members and appeared before the Board to answer questions. That opportunity was helpful to us.

The only significant preview before the state audit release was when each Board member was allowed time alone to read the report at central office, and we had to sign a confidentiality agreement before getting it. (I would like to know some day why on earth I had to sign a confidentiality agreement to read this publicly-funded report requested by the Board of which I was a member.) We were not allowed to take the report off the premises. We got press conference materials the evening before the press conference. We had no information about who was going to be at the press conference or how it was going to be managed.

School boards and other elected bodies have great responsibilities and deserve respect for the job they are required by law to do, especially when they are doing it well.

(Links to the state audit report and the other benchmarking reports are in Part 1)

Tomorrow:  The State Audit’s Mass of Findings: Potshots that Miss the Mark


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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