IPS audits confirm no deficit: overhaul, possible teacher raises coming

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INDIANAPOLIS — Two independent audits confirm what the new Superintendent of Indianapolis Public Schools said in March: that instead of a perceived $30 million deficit, the district is actually operating in the black.

The audits, performed by the State Board of Accounts and Council of Great City Schools, both concluded that the 2013 budget included a $40 million difference in projected versus actual expenditures.

That difference was relayed to the school board by Dr. Lewis Ferebee in March, after the Superintendent completed a look at the district’s books.

“Ultimately, these two reports … validated what I reported,” Ferebee said Tuesday.

Neither audit cited any illegal activity or wrongdoing on the part of previous IPS administrators. However, last summer the district laid off more than 100 people in a move tied to budget issues.

Before those layoffs, former Superintendent Dr. Eugene White said cuts were necessary to dig into a district deficit.

“You’re dealing with a budget that consists of 89 to 90 percent people in this district, and so whenever you cut people, you’re cutting jobs,” White said at the time.

The State Board of Accounts audit expressly said it would not provide any opinions on internal procedures or potential weaknesses in the way IPS prepares its budget.

“We do not express an opinion or any other form of assurance … significant deficiencies may exist that were not identified,” that audit said.

The Council for Great City Schools audit, however, did reach multiple conclusions about the lack of transparency and internal control within the district’s financial office.

“The district’s financial reporting lacks transparency at virtually every level,” that audit stated. “Staff duties, responsibilities and expectations are not clearly defined or understood.”

Auditors also cited a practice of over-budgeting for expenses dating back to at least 2002. That contributed to an understanding within the public that IPS was in debt when in fact, it was not, according to Ferebee.

“I think it’s a positive that we have an opportunity to be more strategic, transparent and … agile with our resources. I think it will result in greater trust,” Ferebee said.

Ferebee has already fired the previous Chief Financial Officer and said an overhaul of the Budget and Finance Department is underway.

In a briefing with media, Ferebee also said the district would begin looking at teacher pay, after years without raises.

“I think this gives us an opportunity to look at doing teacher compensation differently,” Ferebee said.

At the board meeting Tuesday night, though, union leaders said they were cautiously optimistic about potential raises, saying they’d heard promises made before.

“As the bargaining unit looks at the personnel reports, they see some of the same practices going on even now,” union president Rhondalyn Cornett said.

As to the many years both teachers and the public believed the district was operating under serious deficits, Ferebee said he believed greater transparency would correct those perceptions.

“A lot of people just didn’t have faith or trust (in IPS). It’s important now to shape the conversation on what’s actual and what’s real,” Ferebee said.

To read the full complete audits from both independent groups, click on the following link: IPS independent audits