Thursday, March 24, 2016

Continued problems with accounting and budgeting; new consultant

Kermit Weiss wrote:

"NEW POST: Whoops, we missed again (part 1)

It seems like just yesterday that we read the Auditor General’s report on the Pittsburgh Public Schools that found consistent inaccuracies in financial modeling since 2011. A careful read of the internal December 31st financial statements of the district vs. the internal November 30th financial statements of the district suggests a renewed effort by management to hide – during the middle of negotiations – a whopping 2015 surplus.

First, let’s look at the November statements, which were presented to the school board on December`16, 2015:$file/Financial%20Report%20-11-30-2015.pdf 

Page 4 of the PDF projects near breakeven results, a slight surplus of nearly $900,000. But careful inspection cannot stop there. Turn to page 11 of the PDF. After 11 months in the fiscal year, the budget for transfers to other funds was $433,160. There was no budget transfer included in the December 16th meeting. In other words, as of December, there were no plans for large transfers to other funds.

So now we turn to look at the special meeting on January 5, 2016. No budget transfer. But that is not where the meeting gets fun. The Board approves:

RESOLVED, that the Board of Directors of the School District of Pittsburgh authorize its proper officers to enter into a contract with CQI Consulting to support ongoing strategic budget and financial sustainability efforts as well as to support facilitation of Academic Return on Investment efforts to allocate resources to best align with the District’s top priorities. The operating period is from February 1, 2016 through June 30, 2016. The total contract amount shall not exceed $48,400 from account line 1611-16N-2832-3300.

A quick search on the PA Department of State’s website reveals that CQI did not file articles of incorporation with the state until January 8, 2016. The amount of experience this corporation amassed in less than a month must have been impressive, because this item was not included in the Board’s January 20, 2016 posted agenda review materials.



Questioner said...

Kermit Weiss wrote:

"Whoops, we missed again (part 2)

Back to our main topic. So we look to the February 24, 2016 meeting. There is no budget transfer on the agenda.

And yet something changes, for the fifth year running, in the three weeks in March AFTER the district has concluded its 60 day accrual period for revenues and expenditures. Item 15.01 of the March 30th agenda reads:

As of 6:11 pm this evening, there is no attachment and no specifics. But, instead, we find those on the internal December 31st financial statements. Page 5 of the PDF reflects a $4 million dollar increase in fund balance. A casual reader might stop there and conclude that at least is better than prior years.

Except it isn’t.

Turning to page 11 of the PDF file for the December financial statements we now find that the account for transfers to other funds has grown to $20.5 million, a $20 million increase over the statements presented to the Board after 11.5 months of calendar year operation. Where did the money go?

First, on page 16 we find a $5 million transfer to the debt service fund. Second, page 24 shows $8.1 million dollars transferred to the general liability, central duplication services, and self-insurance health care fund combined. The $1 million transferred to the copier fund is particularly festive, since this fund had less than $45,000 in expenses in 2015 period. Turning to page 25 of the PDF, we see the balance of the transfers, or $7.3 million, to the capital improvement fund. In sum total, that is $20 million dollars transferred out of the general fund, all after the actual calendar year expired."

Questioner said...

Is Kermit the only one paying attention? Where is the oversight? And when someone cannot do their job and a consultant needs to be hired, should that person remain in their position? It seems like teachers are held to an entirely different standard than administrators.

Anonymous said...

Who are the principals/names of CQI Consulting? Is this another case of "friends" getting jobs?

Anonymous said...

I find it interesting that when I looked CQI up, it lists c/o United States Corporation Agents, Inc., and no officers are listed.
A mystery...

Anonymous said...

Why aren't any news reporters investigating this? There is almost a daily article in the PG about some other district mishandling the money. PPS is immune to any kind of investigative reporting. Maybe some of the mystery money goes to local media to stay out of PPS's business.

Questioner said...

It looks like someone is hiding something- maybe similar accounting errors at Pps?

Anonymous said...

Let's refresh our memories. Roosevelt resigned in October 2010. Chris Berdnik, the chief financial officer, abruptly resigned in December 2010. Berdnik was paid a $140,000 buyout. Hush money perhaps..? What did he know about the finances that PPS didn't want to be revealed?

When Wagner audited the district in 2013, he criticized the Berdnik deal. We need another independent audit.

Anonymous said...

From the Trib. 1/4/2011

"Buncombe! The just-departed chief financial officer of Pittsburgh Public Schools left with some nice parting gifts. In return for not detailing the reasons for his resignation, Christopher Berdnik will be paid $140,000 for 183 unused sick days and 15.5 unused vacation days and up to another $12,000 for up to nine months of health insurance coverage. Oh, and the district is barred from making any "derogatory comments" about Mr. Berdnik.

The deal and its secret nature is outrageous. This is public money. And the public has every right to full disclosure. Something stinks here."

I wonder how many "back room" deals are done in PPS?

Anonymous said...

I was outraged after the audit and thought for sure that things would change. The huge balance PPS was carrying while raising taxes hurt me bad.But nothing changed, I posted here that my taxes we're high and that I was having trouble paying to continue living in the city. Then at the same time, Gov. Wolf is saying the schools are broke and no-one else thought this was fishy. I even stopped watching board meetings on TV because I felt so betrayed by everyone.
It seemed like nobody cared that I'm having trouble with school taxes. I came to the conclusion that I can just move out, I'm not part of any consideration in any discussions.

Anonymous said...

My spouse worked with Berdnik. He drove Roosevelt and company crazy by pointing out inaccuracies and showing them how to save money, and gave suggestions how to change. This went over like a lead balloon. A few people that didn't play Roosevelts game got let go about the same time. Berdnik was no angel, but he didn't fit the Roosevelt mold. Shut up and do what I say. I'm not sure why he got a sweet deal for his departure. I'm guessing it was to cover up what he knew.

Anonymous said...

According to the most recent agenda review:

Micheaux Educational Consulting, LLC will be paid $45,400 7/1/16 - 10/31/16 to transition the new Superintendent. Retire and then consult. The gravy train continues. Who will hop aboard next to consult?