Fiscal Rangers

Issues Surrounding Pending Bankruptcy of California City

Below is an extract from an email I received from a County Commissioner in Orange County, CA, John Moorlach. It is about the California city of Vallejo which is about to declare bankruptcy, and there are also some details about the local School District, which also apparently went bankrupt a few years ago. A major reason is that the City is paying about 80% of its income for fire and police and their excessive pensions pushed through by the unions in the past. Now, during the economic decline, Vallejo doesn't have enough funds and will run out in April, 2008 and won't have funds to pay employees. Orange County, CA went through bankruptcy in the 1990's due to risky investments, and I lived there at the time. Earlier posts on this blog cover that situation. I am adding this as a background statement on what can happen when elected officials cave in to unions like fire and police and pay high wages or promise excess pensions that lock the city into excess spending that leaves nothing for other city responsibilities. Moorlach covers this because the County of Orange County, CA has huge unfunded and growing liabilities for sheriff pensions promised... Read more →

Michigan School District's Poor Fiscal Controls Allow $2.3-million embezzlement over 8 years

Another school district, this one with about 20 schools in Chippewa Valley, Michigan, fell victim to lack of proper purchasing systems and controls and allowed a bid rigging scheme to run for about 8 years. As a result, the school district's "executive director of support services" set up secret companies that he gave business to, paying inflated prices of about 46% for purchased goods and embezzling excess profits of about $2.3-million between 1998 and 2006. Favorite quote: The scam escaped the detection of school board members and administrators who reviewed bids and billings until school officials received an anonymous tip in 2006. After an internal investigation, the school board quickly moved to fire Tague and implement new safeguards to prevent a similar scam from happening again. AND, finally: Chippewa Valley also was the victim of a former elementary school principal convicted of stealing. Richard Zaranek is serving a 31-month prison sentence after he admitted taking $400,000 in money and goods from a child care program. There was no mention anywhere in the article about what sanctions were implemented with the school staff and CFO for allowing such lax controls, or whether there were any audits of school operations. vj ============================================... Read more →

Lake County School School District Super Anna Cowin Ignores Requiring Staff Performance Evaluations

Today, the Orlando Sentinel published a LONG front page article (see below) by Tanya Caldwell on how Lake School District's Superintendent, Anna Cowin, has not performed required written performance evaluations for her SIX top managers since her election in 2004, and only two of the six had old 2004 evaluations from an earlier superintendent in their personnel files. These are the same managers she has requested significant raises for, and apparently there is no written evidence to indicate any justification for the raises (which were turned down by the Board awhile back. There is a Board policy, like other Florida School Districts, that requires written performance evaluations for all staff, but Cowin has ignored it, and there are no sanctions that the Board can implement to enforce the policy. First, no current staff should get ANY raises in the future approved by the Board until written evaluations are professionally done, and the Board ALSO needs to monitor compliance with this and other policies to highlight what is not being done by Cowin. Otherwise, the Board is part of the problem by not highlighting the lack of compliance by Cowin. vj ======================================== orlandosentinel.com/news/local/orl-noevals1008feb10,0,1677486.story OrlandoSentinel.com SENTINEL EXCLUSIVE Cowin has not reviewed top... Read more →

Anna Cowin Mismanagement Issues Pile Up some More

Anna Cowin, elected Superintendent of the Lake County School District (FL) is having a bad month... We previously posted Lauren Ritchie's Orlando Sentinel article about the great improvements made by a Superintendent of another Florida School District, and some comparisons to Lake County and Cowin's actions. Then Ritchie followed up with two other articles expanding on the issue, and responses from Cowin on some questions, so they are included below for the record. Then, today, the Sentinel published a story by reporter Tanya Caldwell about Cowin's failure to complete any employee written evaluations for her senior staff in the last three years, with lots of details. So, the next post after this includes that article. Read and weep...and congrats to the Orlando Sentinel for spending the time to ferret this stuff out... vj ==================================================== Lauren Ritchie published her first column on the successes of the School Superintendent for Okaloosa County on Feb. 1, which we included in our Feb. 1 post on this blog at http://webworks.typepad.com/lakecountyfiscalrangers/2008/02/florida-school.html Below, in order, are two subsequent columns following up on the issue: ===================================================== This was the first follow up column on Feb. 3rd, 2008: orlandosentinel.com/news/local/lake/orl-lritchie0308feb03,0,5153355.column OrlandoSentinel.com COMMENTARY Lakefront Cowin claims she reformed schools -... Read more →

Arizona School District Suffers Massive financial mess created by former Superintendent

This article describes an extreme case of School District mis-management in Arizona that caused massive financial problems that could lead to bankruptcy, or being closed and students being bused to another District. The district had to pay an outside consultant to write a 107 page report on how to unravel a financial mess apparently created by a former Superintendent, and the consultant said he should be "should be stripped of his teaching, principal and superintendent certificates." I don't have any information that Lake County has problems anywhere near those described like in Arizona, but read this and learn the red flags to look for. Once again, this Arizona example seems to indicate the K-12 "education" profession lacks requirements for Superintendents to have management ability to actually be able to manage business operations of a District. Favorite quote on how bad this was... "Possible outcomes for resolutions of the district's financial problems include no change in the district's overexpenditure corrections period, legislative extension of that period, converting into a transportation-only district, converting into a charter school district, or bankruptcy." vj ================================================== from Kingman, AZ 2/1/2008 1:44:00 PM Report: Educator should be stripped of credentials Terry Organ Miner Staff Writer (Kingman, AZ)... Read more →

Memphis School District Wastes $207,000+ on Copiers Approved by Dead Official

Here is a classic case of waste in a School District, caused by a "virtual breakdown in purchasing controls". An aggressive salesman oversold a district manager on the merits of THREE $200,000 copying machines that then were NOT used because the schools didn't have the electric power to run them. Additionally, the purchase was endorsed in a letter with a forged signature of the Schools' attorney who had been dead for 7 months. It appears the letter was used to convince a financing company that the deal was sound. And, the salesman is accused of offering free computers to employees who made the decision (but not proven), clearly indicating the need for a strong ethics policy on the part of both the District and the copier vendor if that actually happened. This article highlights a trend where capital equipment is purchased or leased without any regard to the operating costs or ability to run the equipment (lack of adequate power capabilities). This is like the Dell computer purchase fiasco at Lake County where they bought Dell computers without including the cost of an operating system, and installing servers in schools that do not have adequate air conditioned rooms for them... Read more →

Florida School District Supt. Turns It Around Using Business Techniques

The main thrust of this blog is that taxpayers deserve the same quality of management and performance tracking with benchmarks from government agencies that businesses practice. And that includes the Lake County School District. Most of the articles we have posted here about School Districts have been about fiascos or missing management methods. But here is one about a District that practiced good management like businesses do on a daily basis. Columnist Lauren Ritchie from the Orlando Sentinel wrote a great overview today of the former School Superintendent of Florida's Okaloosa County, Don Gaetz, who used "lean, mean" management techniques to reduce District expenses and vastly improve the performance of all the schools in the district. Gaetz is now a freshman Florida State Senator. The Wall St. Journal, according to Ritchie, also wrote an article about the District's success in "incorporating disabled students into regular classrooms" while spending less per student than most other districts. Read the article below, then come back to these comments: Comments: 1) Gaetz basically implemented a "holding company" approach to School District management by reducing the central administration staff and pushing funding, decisions and performance tracking to school principals and school advisory committees. Coincidentally, today's... Read more →