Indiana

IPS shocker: $30 million deficit was phony

PHOTO: Scott Elliott

The $30 million deficit Indianapolis Public Schools has been bemoaning for nearly a year doesn’t exist, new Superintendent Lewis Ferebee said today.

In fact, Ferebee told the school board, IPS ended 2013 with an $8.4 million surplus.

Based on his own analysis, corroborated by the district’s attorneys and an accountant, Ferebee concluded the deficit was a phantom and speculated that IPS’s prior administration “intentionally overstated expenses to protect our cash balance,” he said.

“I’m at a point now where I feel like I have enough information to confirm that we don’t have a structural deficit,” he said. “I think it’s important to be transparent with the community.”

The revelation comes as IPS approaches its budget-making season and may instantly relieve the need for drastic cuts the school board was expected to consider to try to rein in what it believed to be massive overspending. In other words, it could keep schools open, save teachers’ jobs and keep programs that benefit students from being cut.

“I sought counsel from our legal counsel and also the CPA of our legal firm,” Ferebee said. “They said, ‘you’re not crazy. We see some of the same things.’ ”

In recent years under former Superintendent Eugene White, the district made nearly annual announcements of deficits, which led to layoffs, pay freezes and cuts in programs and services for students. Ferebee said he believed those reports of deficits were designed to quietly keep a strong cash balance to cover any unexpected expenses that might otherwise be difficult to address during the school year. Board members and the public were led to believe IPS was falling short financially, he said. White and former interim Superintendent Peggy Hinckley said late Tuesday they were skeptical of Ferebee’s analysis.

Ferebee said he believed the practice went back years. Without naming names he also said he expected unspecified “personnel changes” would be one of the results of his investigation.

Last year, interim Superintendent Peggy Hinckley raised alarms about the deficit, suggesting IPS would have to consider closing as many as 10 schools to get its spending under control. Hinckley, who was replaced by Ferebee in September, predicted IPS would have to tap reserve funds to make it through this school year.

But Ferebee said he discovered a disconnect when he began digging into IPS’s financial position during the district’s winter break in December. The numbers didn’t add up, he said.

What he found, Ferebee said, was the district’s budgeting system was entirely disconnected from its actual spending and income. To make the budget, Ferebee said, IPS used estimated revenues and included in its spending plan a host of programs and initiatives that were more speculative than real.

For example, Ferebee said IPS included in its budget in recent years the creation of a science and technology magnet high school, setting aside dollars for a school that was never launched. The school board, he said, was unaware that this money was not being spent, even at year’s end. Board members were never shown the difference between what budgeted and what was actually spent.

IPS’s budget projected revenue of $244 million and $274 million in spending for the calendar year that just ended in December of 2013. The $30 million difference was the deficit that district officials repeatedly said since last spring needed to be closed, and which prompted Hinckley’s call for school closings.

But at the end of the year, Ferebee said, the actual spending number was quite different. While revenue was close to the projection at $246.2 million, spending was much lower at only $237.8 million, resulting in an $8.4 million surplus, not a deficit.

“I had a lot of emotions,” Ferebee said of his reaction once he was certain his numbers were right. “It was very disappointing for me that we were communicating we had a budget deficit when we actually didn’t.”

A report on IPS’s operations released last month by the Indianapolis Chamber of Commerce referenced the budgeting problem and recommended moving toward a budget based on actual numbers instead of projections. Ferebee said the plan going forward is for monthly reports to the board on actual spending and revenue compared to the budget projections for both.

While the vanishing deficit may be hard to explain to the community, it’s also a golden opportunity to demonstrate a new level of transparency about the district’s decision making, Ferebee said.

For students and teachers, Ferebee said a surplus instead of a deficit means IPS likely will not face school closings or layoffs this year. Ferebee said IPS is entering talks with unions about revamping its compensation system, and the surplus means raises at least could be considered. Most district employees have not had a raise in five years beyond automatic hikes under union contracts that reward added years of experience and additional education credits earned.

For parents and students, it also means IPS can look at how to make changes to try to improve learning, not just focus on ways to save money, Ferebee said.

“This is an opportunity for us to be more strategic in our efforts in terms of how we support students and families and how we improve student outcomes,” he said. “We have a long way to go as it relates to improving student achievement. Knowing that we don’t have a structural deficit definitely opens doors of opportunity for how we support our students.”

What's Your Education Story?

As the 2018 school year begins, join us for storytelling from Indianapolis educators

PHOTO: Dylan Peers McCoy/Chalkbeat
Sarah TeKolste, right, and Lori Jenkins at a Teacher Story Slam, in April.

In partnership with Teachers Lounge Indy, Chalkbeat is hosting another teacher story slam this fall featuring educators from across the city.

Over the past couple of years, Chalkbeat has brought readers personal stories from teachers and students through the events. Some of our favorites touched on how a teacher won the trust of her most skeptical student, why another teacher decided to come out to his students, and one educator’s call to ramp up the number of students pursuing a college education.

The event, 5:30 p.m. Thursday, Sept. 13, is free and open to the public — please RSVP here.

Event details:

5:30 p.m. to 7:30 p.m.
Thursday, Sept. 13, 2018
Tube Factory artspace
1125 Cruft St., Indianapolis, IN 46203
Get tickets here and find more on Facebook

More in What's Your Education Story?

School safety

Hiring more security officers in Memphis after school shootings could have unintended consequences

PHOTO: Jahi Chikwendiu/The Washington Post/Getty Images

Tennessee’s largest district, Shelby County Schools, is slated to add more school resource officers under the proposed budget for next school year.

Superintendent Dorsey Hopson earmarked $2 million to hire 30 school resource officers in addition to the 98 already in some of its 150-plus schools. The school board is scheduled to vote on the budget Tuesday.

But an increase in law enforcement officers could have unintended consequences.

A new state law that bans local governments from refusing to cooperate with federal immigration officials could put school resource officers in an awkward position.

Tennessee Education Commissioner Candice McQueen recently reminded school personnel they are not obligated to release student information regarding immigration status. School resource officers employed by police or sheriff’s departments, however, do not answer to school districts. Shelby County Schools is still reviewing the law, but school board members have previously gone on the record emphasizing their commitment to protecting undocumented students.

“Right now we are just trying to get a better understanding of the law and the impact that it may have,” said Natalia Powers, a district spokeswoman.

Also, incidents of excessive force and racial bias toward black students have cropped up in recent years. Two white Memphis officers were fired in 2013 after hitting a black student and wrestling her to the ground because she was “yelling and cussing” on school grounds. And mothers of four elementary school students recently filed a lawsuit against a Murfreesboro officer who arrested them at school in 2016 for failing to break up a fight that occurred off-campus.

Just how common those incidents are in Memphis is unclear. In response to Chalkbeat’s query for the number and type of complaints in the last two school years, Shelby County Schools said it “does not have any documents responsive to this request.”

Currently, 38 school resource officers are sheriff’s deputies, and the rest are security officers hired by Shelby County Schools. The officers respond and work to prevent criminal activity in all high schools and middle schools, Hopson said. The 30 additional officers would augment staffing at some schools and for the first time, branch out to some elementary schools. Hopson said those decisions will be based on crime rates in surrounding neighborhoods and school incidents.

Hopson’s initial recommendation for more school resource officers was in response to the school shooting in Parkland, Florida, that killed 17 people and sparked a wave of student activism on school safety, including in Memphis.

Gov. Bill Haslam’s recent $30 million budget boost would allow school districts across Tennessee to hire more law enforcement officers or improve building security. Measures to arm some teachers with guns or outlaw certain types of guns have fallen flat.


For more on the role and history of school resource officers in Tennessee, read our five things to know.


Sheriff’s deputies and district security officers meet weekly, said Capt. Dallas Lavergne of the Shelby County Sheriff’s Office. When the Memphis Police Department pulled their officers out of school buildings following the merger of city and county school systems, the county Sheriff’s Office replaced them with deputies.

All deputy recruits go through school resource officer training, and those who are assigned to schools get additional annual training. In a 2013 review of police academies across the nation, Tennessee was cited as the only state that had specific training for officers deployed to schools.