Thursday, March 21, 2013

PPS financial predictions v. actual outcome

On another post Anonymous wrote:

New post:

So at the March 5, 2013 Finance meeting Budget Officer Ronald Joseph told the Board that fiscal 2012 - which ended December 31, 2012 - would end in more than a $6 million dollar deficit, meaning that expenses would be higher than revenues.

Oh what a difference two weeks makes.

Fast forward to March 20, 2013. The financial report in the Board Minutes reveals that fiscal 2012 actually ended with a SURPLUS on the year of more than $7 million.

Municipal accounting allows for a 60 day runout of revenues and expenditures, meaning that all activity would have ended on February 28, 2013.

Memo to Pete Camarda and Ron Joseph: exactly how did your forecast of 2012 - one week after all activity would have been recorded - get it wrong by $13 million? Does this mean that you aren't really tracking year to date budget to actual and associated variances?

How do you get it wrong by $13 million when the year is over and cry poor at the March 5th meeting?

Folks, it's even worse. The statements reflect a $1 million transfer to the unemployment compensation fund, a $1 million transfer to the General Liability fund, and a $2 million transfer to the self insurance health care fund. Without those transfers, the actual 2012 surplus would have been more than $11 million. How many of those transfer were done AFTER you realized how bad your forecast was?

This is the second year in a row that the district has run a very large surplus on the year while crying poor in public.

Why exactly should we trust your projections for 2013 or any other year? Two weeks and all activity had ceased!

Take this a step further - with the roughly $14 million fund balance growth over the last two years, why did the district enact a tax increase for 2013? Did we cut more teachers than we needed to?

It's time for a full investigation.


Anonymous said...


A singular lack of competence or pure, unadulterated deception?

Anonymous said...

It could be more interesting than that. For instance, on 725277FD4 from school district Bond Series B of 2012 there were a series of trades that could have been made based on that information.

Someone very enterprising might look through all the district's CUSIPS to see what trades have been made between the release of that wholly incorrect forecast and the release of the actual results.

Anonymous said...

There were also trades on CUSIP 725277DQ7 between after March 5th, but before March 20th. Like the strip ending in FD4 they are small enough to not make waves, but be profitable for someone that knew the numbers were different than reported in early March.

Anonymous said...

Eleanor Chute, a PPS grad and PG reporter, will never do such a piece. The PG editorial board continues to laud the district, no matter what it does. Andy Sheehan, who has children in PPS, has never asked a PPS administrator a meaningful question. Marty Griffin, who alternates between teacher-basher and honest-to-goodness investigative reporter, asked Lane tough questions during Lellock's initial arrest, was never really answered...and we never heard from him again.
WTAE and Jim Parsons? No.
WPXI and Rick Earle? Probably looking for corrupt bingo games.
The point is, ask yourself why this kind of information is not addressed and investigated. Ask yourself why the numerous sexual misconduct cases and allegations are never investigated.
Something is rotten in this town.
Has journalism changed this drastically to the point where audacious misdeeds by public officials get short shrift? Or is it something else?
We either have cowards in our local newsrooms, or the corruption we see in PPS pervades even into journalism.
It was a sad day when Mark Roosevelt was allowed to land here, but it was a tragic day when a charlatan like Bill Gates donated money to push his outrageous philosophies.
The district has a lot of hands in the till.

Anonymous said...

Wow, I need someone to explain this is layman's terms. Not an accountant.

Anonymous said...

Anyone looking for a pattern of deception would want to look at 2011's nearly $7 million surplus and realize that it was higher too before what appears to be an inflated year end transfer between the district's general fund and it's special education fund that overstated function 1200 costs at December 31, 2011.

This would not be a hard journal entry to find.

Anonymous said...

In laymen's terms the folks responsible for accurate financial disclosure and modeling are missing the mark by a wide margin even when the fiscal year is over. Forget about projecting the future correctly, Camarda and Joseph aren't even stating the past as it was.

This appears to be a combination of sloppy and deceptive.

There might even be evidence of the municipal equivalent of insider trading, with someone profiting from their errors.

Anonymous said...

They got in wrong last year too by a wide margin. There was a thread on the blog then too. Not the fascinating connection to areas of interest for the Securities and Exchange Commission that we have on the thread this year.

Yes Nina, this means you've been had two years running. Wake up or send in someone from DC to trace these breadcrumbs.

Anonymous said...

If I remember Mr. Camarda's math correctly, $7 million translates into more than 70 teachers.

Sad to say, but poor budgeting practices would have made class size larger than it needed to be for 2012-13 coming on the heels of poor test scores.

Anonymous said...

Well how about: Eleanor Chute attempts to ride with a piece in today's (March 22, 2013) Post-Gazette with a decidedly one-sided, hastily thrown together article: 1) one-sided because the only "voice" you hear quoted is Pete Camarda (also a sign of hastily thrown together); 2) the piece lacks any "bite" of asking exactly why any of the factors cited by Canarda would have changed between March 5th and March 20th.

That's ok Pete and Eleanor, we're going to do that work right now for you.

The first factor cited is increased tax revenues. No doubt, but that really answers a different question. Tax revenues are transferred on a daily basis to the school. The trend of increased collections was discernible several months earlier with year over year comparisons. The last deposit that would have had any money that could have any funds applicable to 2012 would have been the last business day of February 2013, in plenty of time to report by March 5th.

Let's look at the next factor: salaries and benefits. The employee group cited by Camarda - teachers - is paid semi-monthly. Taking the first two semi-monthly pays of the 2012-13 school year and comparing them to the first two semi-monthly payrolls of 2011-12 would have given Mr. Camarda and Mr. Joseph a run rate no later than in October to know that salaries would end substantially lower than budgeted.

How about the natural bill cited by Camarda? Again, the district's bill actually has three distinct pieces: a basis cost, a transportation cost, and then the commodity itself. Just like at home, you receive a bill once a month. The rates per mcf for basis and transportation would have been fixed and known well in advance. In fact, by the end of December (3 months ago) with great certainty you would have known the trend because the peak heating months of January 2012 and February 2012 had long since passed. No bill received at worst after mid-February would have had any December cost at all. Even if December was uncertain, a smart budget analyst knows he can compare the number of degree days of a rough approximation of the impact of weather on your natural gas forecast. Whether the per mcf cost of the commodity was an absolute float (unlikely since the district had long bought its gas in layered pricing month blocks at a time), the NYMEX price of gas for the entire month of December would have been known in -say it with me- December, not after your March 5th projection.

What is really sad is that the school district is not accounting for its costs on fingers and toes such that the extra two weeks would have made a $13 MILLION DOLLAR DIFFERENCE IN MARCH (after the fiscal year closed). In the Thompson era the district made a multimillion dollar investment in Peoplesoft Financials, including the purchase of a robust reporting tool nVision out of which comes all of the pre-fabricated monthly reports printed in the Board minutes.

Let's be honest with the public, the taxpayers, and the Board, Pete and Eleanor: the last payrolls with any dates of service applicable to 2012 that had any chance of moving your forecasted numbers would have been paid out in January 2013, not after March 5th.

So Linda Lane needs to ask and answer some hard questions to regain any shred of credibility. Ask to see the reports that formed the basis for the March 5th projection. This won't be hard because every report has a date and time stamp printed on it. In fact, you don't even have to ask Pete Camarda and Ron Joseph: you can run the Peoplesoft report that shows you every time THEY ran a Peoplesoft report.

Anonymous said...

Oh Eleanor (continued).

Dig a little deeper here than the explanations provided by Pete that you printed on March 22nd to the post put on the blog on the 21st; his answers are an unadulterated load of horse manure. You can fix this or we can provide an even more detailed road map to either the Obama Eagle or the City Paper.

As for Mr. Camarda and Mr. Joseph, time to dust off some better practices or you can expect Mark Brentley to be loaded for bear at each legislative meeting to lay naked the poor quality of your projections. You can take this projection to the bank: the details of our analysis will be provided to the national research staff of the AFT.

Questioner said...

What if all 9 board members were as hard working as Mark Brentley and Regina Holley?

Anonymous said...

I wonder if "accounting/budgets" like this are why Chris Berdnik got out?

Anonymous said...

So the question is natural: is anyone sending all of this information to Pittsburgh media?

Let me speak for my colleague teachers: we are cowards. We will do nothing. We have not learned from the union brothers and sisters before us that there is power in numbers. So we do nothing and simply complain.

It's a wonder we can sleep at night.

But perhaps there is hope in parents. No administrator can fire you.

Please tell me someone is sending this to media.

Anonymous said...

I don’t believe that teachers are cowards but I do believe that they are scared right now. I think that in the current national climate they are victims, along with students, families, and communities. Teachers do one of the hardest jobs out there and they do it with strength and courage every day. It takes incredible dedication and commitment to teach. Their silence has been planned. Seeing dissenters targeted and harassed only to lose their jobs and find their careers in shambles has the effect it was intended to have. Fear. Self-preservation. Because teachers are people with families and lives outside the classroom. What is playing out in Pittsburgh is playing out all over the country. We do need parents and community leaders. We need numbers and groups coming together to stand up together. It is not fair to ask individuals to put their necks and livelihood on the line and it’s not effective. Unfortunately so many experienced individuals are being pushed out that our ability to come together and stand strong is being diminished daily. This is by design and it is national. Pittsburgh is by no means unique in these problems. The union could and should serve as a galvanizing rally point for all of the groups that are being hurt by the incredible misdirection and abuse of power going on.

Questioner said...

It sounds like there is a need to put responsibility for poor results somewhere, and administrators won't take the blame, and organizations with a lot of money like Broad Gates don't have to take blame, so it's teachers. Which is also a way to keep salaries low.

Anonymous said...

"We need numbers and groups coming together to stand up together. It is not fair to ask individuals to put their necks and livelihood on the line and it’s not effective. Unfortunately so many experienced individuals are being pushed out that our ability to come together and stand strong is being diminished daily"

In the late 1960's, PPS teachers were making around 3K/year. It was slave labor, even then. The PFT struck for better pay. They banded together. They dared the courts to arrest them. Even them, numerous individuals crossed picket lines and yet, enjoyed the fruit of the labors of those with courage.

Sorry, but I disagree with you. Today, you cannot even get a group to come together. Fear, surely. You have a refreshing force wishing to take over the union in an election, and a group that writes letters on behalf of the ultra-cowards currently in charge. And on top of that, you have 1000 teachers who don't even vote.

We ARE cowards, and we deserve what we get.

Sure, I have to remain anonymous here for fear of my employment and yet, I know of hundreds---hundreds---who will whine but would never do something where they are "outed." They would never come together to meet, to discuss, to protest, to walk out, etc.

They will in Tacoma and Seattle. They even will in Chicago.

But we are cowards. There is no hope, and central admin both laughs and does as it pleases.

Parents are our only hope and truly, the only hope for the students.

Anonymous said...

Watch parts of the documentary Shadows of. Liberty and you will see that the one percent has taken over the media , just as the have public education. Media can't tell us this story even if they want to. And not for nothing , but Chicago just announced closing 61 schools.

Anonymous said...

Are there any organizations that have budgeting classes specific to school districts? Maybe Camarda and Joseph just need more professional development?

Questioner said...

Camarda is retiring. Does Joseph have enough experience?

Anonymous said...

Ms Fearby-Jones appears to be open, honest, humble (as opposed to arrogant) and determined to do the right thing (as opposed to a contrived, prescribed thing. She has not taken on the "ignore certain people" and "protect others" stance that is the PPS administrative mode of operation.

This openness, hopefully, will allow her to share her own insights with the Superintendent regarding the people she meets who care about our students.

Currently, this is NOT a prevailing manner or method of operating in the PPS system. Admin refuses to listen or acknowledge anyone who dissents (in their opinion) or in anyway detracts from the "image" the district wants projected.

Honesty (and a little humility) is always the best policy as we strive for better results.

Anonymous said...


One such organization would be the Pennsylvania Association of School Business Officials, which just had their annual conference at the Pittsburgh Convention Center.

Three PASBO conferences in a row Pittsburgh's former CFO has presented a workshop on school district budgeting, including multi year forecasting, such as this year's "Creating a Culture of Cost Reduction without Demoralizing Staff."

Anonymous said...

March 23 @ 8:54 am. You're absolutely correct. Teachers have folded into a mode of complacency, acceptance and don't dare speak up. They know that their union leaders provide no leadership yet alone support for teachers. The sad thing is that our union leaders Tarka and now Esposito chose the wrong battles. Some of the very same principals they rallied against were the very ones who supported quality teachers most. That doesn't mean that these principals never encouraged poor performing teachers out of the profession because they did and teachers like me supported their efforts. Poor teachers not only cheat our students but make my job of their colleagues more difficult.

Now what we have is a new crop of principals schooled in PELA. Their lack of administrative experience makes them followers instead of leaders. They have swallowed hook, line and sinker the philosophy of targeting veteran teachers. Central Office has set the stage for their agenda of stretching the budget by decreasing the number of higher paid employees. Just look at the money that the Office of Finance reported that was saved due to retirements, resignations and terminations.

We are cowards for we remain silent in fear of retribution for our own job. As RISE has become more finalized in the past years, an atmosphere of intimidation permeates and the lack of any backbone by the union has turned lions into lambs. The plan of Gates and Broad is working. Unions will be broke and urban educational systems will fall one by one to charter and for profit schools for there is money to be made. Teacher contracts will be a memory of the past and young, inexperienced teachers will come and go making teaching a transient position as those with some experience will look for careers with higher pay and position security.

Anonymous said...

Well said 8:54. And to the parents and taxpayers otu there-- your studentsd are the ultimate victims here- They are in a hostile working environment; they are getting short changed by the script and the saddest part is the arrogance with whioh Bellefield carries out the Gates'/ Broad plan. It is so hard to see and believe that our teachers have no passion,they are afraid to speak out at meetings, at the union, in the halls-- the public cannot begin to understand the level of intimidation that is going on in this district.

Anonymous said...

From the inside (Bellefield) I can tell you nothing will help you. I left a few years ago. I was "let go" for trying.

Anonymous said...

I am a teacher who was intimidated so much that I had a mental breakdown. I lost my job and a career that I loved and took a disability retirement. I was truly passionate about my students and their education. I now have enough strength to fight back with a lawyer but can't seem to find a good one who is willing to take this on.

Anonymous said...

How can the forecast be this bad?

First, they brought in Two Bell LLC (company filed incorporation papers the same day they started working at PPS). Then they brought in a collection of guys that ran the Detroit Public Schools into the ground. Now they have the $2.4 million visionaries. If that wasn't enough, out of desperation the retired PNC banker has been in and out of Bellefield.

This is no way to run a half billion dollar business.

Anonymous said...

There are some good attorneys out there who will take this on. Ask around. One, in particular, often checks this site. There should be a way to make contact without posting names.

Anonymous said...

Thanks for the info 5:41. I have asked around and have not been successful. Perhaps the moderator can help get us in touch with one another.

Anonymous said...

I am concerned that more and more many parents have adopted the "i got mine" stance and are unwilling to participate in any discourse or action for change. Even the dustup over the CBAs died down quickly. I have grads but many relatives with kids in school and they are tending other irons in their fires simply because the response they got on previous issues did not change a thing. That reaction is all they have come to expect. Maybe the activism has to come from our students. Maybe their parents will be inspired and join in.

Anonymous said...

Students in RI have been loudly protesting the over use of testing. It would be nice to see some of that here. In Chicago the union made a concerted effort to reach out to and unite parents, students, and community members in advance of their strike. They are still struggling as the mayor and district plan on closing an incredible number of schools but they are working together in their fight against it. We need unity here. It seems like A+ could have facilitated that unity, or the union. That isn't happening though. These issues have to be addressed from a grassroots level because it's at that level that people are the most impacted. Solutions to problems in public education should come from families, teachers and communities. This blog is wonderful for discussion but we need something that people here can get behind to generate action. We really need some strong, unified action.

Questioner said...

The best bet is to elect the right people to the school board. Have you gotten involved in any of the campaigns?

Anonymous said...

In my distrcit the candidate is running unopposed but shows signs that she has an understanding of all the issues and is agreement with parents on many.

Anonymous said...

There is a great deal of information about the targeting of veteran teachers here that is completely accurate. Yes, RISE is a way to dump salary. Period. It is subjective and all depends on the people doing the observing...and their intentions. If the intent is to lop off veteran salary, they will find something to get you on.
Questioner, this is no exaggeration.
But to those claiming that pensions can be attacked, this is patently false. i *hate* central administration because they have demonized us, but that is not true. Ask your PSERS rep. Ask a labor attorney.
I have.
Do something illegal and yes, you will have a pension problem. But resign under pressure or get terminated due to 2 successive poor ratings, and your pension is intact.
Please stop the exaggeration.
I am all for suing the district for character assassinations, etc. I am all for going after them for workplace intimidation. But older teachers need to get a grip on what the ramifications are ....and are not.
Questioner, and are dealing with a breed of central admin that is unlike anything I have seen in education or industry. The words 'evil,' 'vicious,' 'conniving,' and 'sniveling' come to mind.
This is holy season, but I cannot help but pray that people in central administration who have prioritized targeting good, dedicated, caring and devoted teachers will pay for their actions.
Forgive me.
Having seen so many teachers made to resign, get fired or placed under enormous pressure for no other reason than to drop salaries---again, these are solid individuals who have bled blood for your kids over decades---I can do nothing else.