Follow the Money: What's Hiding In Your School District's Spending?
Over an eight year period at the Dallas Morning News, Kent Fischer and his fellow reporters assembled a pool of information about the finances of the Dallas Independent School District that eventually lead to the discovery that the system was shouldering a $144 million debt burden. The fallout from the story was extensive, with hundreds of layoffs, a brutal state audit and at least one felony conviction.
Fischer, who’s now a vice president at communications firm GMMB and a board member of EWA, joined our own Emily Richmond (no stranger to shining a light on malfeasance herself) for an EWA webinar this week to talk about the work that went into collecting, sorting and scrutinizing millions of data points.
His first message was to “tell your editor the budget doesn’t matter.” Fischer explained “those stories tend to not be enlightening for the reader” and that they “don’t give folks a real good sense of the district’s financial health.” (PowerPoint)
In many districts, annual budgets are cobbled together based on last year’s numbers, not the actual amounts of money remaining in their coffers. Fischer began a routine of submitting public records requests and transferred the data to Microsoft Access files on his computers, with help from DMN’s content management pro. Fischer asked for payroll lists with names, birthdates, and employee ID numbers, credit card balances, contract receipts, and other items that are paid for by public money. An Outlook email reminder would pop up every month or two and he would submit his requests again. The rote nature of the process whittled down the time he had to spend on collecting the information and helped the district staffers responsible for the data grow familiar with him, which simplified the process even more.
After a while, patterns will start to emerge from the data, Fischer said, but it helps to know what you’re looking for up-front. Familiarizing yourself with district accounting terms can reveal much about a particular document.
The perquisites packed into Access make the software program more powerful than Excel: Various budget codes, employee IDs or other bureaucratic tags can be culled and arranged for easy viewing. Held up against the official budget, examples of serious over-spending within the Dallas district became apparent to Fischer and his colleagues.
Eventually, the paper’s microscopic treatment of the school system’s finances led to some big breaks:
- Teachers with stated salaries of $55,000 were making nearly $20,000 in additional pay through other types of compensation;
- $12 million spent on budget software that did little to notify leaders that the district lost over $60 million one year;
- A car stipend for an employee who didn't have a driver’s license, and many other nuggets that outraged the public.
Fischer and Richmond offered some other tips:
- Get to know AMB-A87, the federal government’s long list of acceptable purchases through various grants. Often school officials simply don’t know what they’re buying is not sanctioned.
- Find out the limits on credit card issued to employees and watch out for purchases made using multiple accounts; it can lead to big discoveries -- such as unauthorized first-class plane tickets to Spain.
- Know the maximum dollar amount allowed on contracts before a public hearing needs to be held. If the ceiling is set at $25,000, and a bevy of transactions pass through totaling just shy of that amount, it might mean district officials are giving friends no-bid contracts that would never fly if debated in a public forum like a school board meeting.
- Ask for total compensation records, not just salary, and for a breakdown explaining the supplemental income. It’s also a good idea to make the compensation requests just before the calendar year ends, that way you can see the pre-tax totals and compare them to what the budget permitted.