City schools risk large deficit
Ohio audit advises cuts of $53M

Thursday, October 15, 1998

BY DANA DiFILIPPO
The Cincinnati Enquirer

Expensive reforms and a shaky reliance on tax levies may leave Cincinnati Public Schools (CPS) with an operating deficit of up to $260.3 million within five years, the Ohio Auditor's Office has found.

The performance audit, to be released today, highlights nearly $53 million in potential cuts CPS could make annually by correcting overspending problems, poor record-keeping and other inefficiencies. The cuts target teaching staff, transportation, technology and facilities.

Although the district had a surplus at the end of the 1997-98 year, projections indicate that spending will outpace revenues for the next five years as administrators implement expensive reforms.

Even if the district persuades voters to renew two tax levies totaling about $66 million in the next three years, administrators still expect a deficit of $136.5 million by 2002-03. If the levies aren't approved, the deficit would be $260.3 million.

District Treasurer Richard Gardner attributed the impending deficit to inflation and the district's reliance on tax levies. Administrators aim to place a levy on the November 1999 ballot that, if passed, would wipe out the deficit, he added.

COMMENDATIONS
The Ohio auditor's performance audit of Cincinnati Public Schools praised several district initiatives, including:

  • The facilities master plan. The district is expected to release the plan Oct. 26. An advisory committee comprising teachers, administrators, parents, business leaders and community members spent 18 months inventorying district buildings and recommending future uses.
  • Pay for performance. The district's merit-pay system, unpopular among administrators when it was implemented three years ago, has prompted praise for ensuring accountability.
  • Students First strategic plan. This five-year plan outlines academic reforms.
  • Buenger Commission report. CPS administrators have implemented two thirds of the recommendations in this 1991 report, in which Tristate business leaders advised the district on improving efficiency and accountability.
  • Student-based budgeting. Mobility has been a problem in CPS, so administrators adopted a policy in which money follows students. Professional practice schools. This program, a partnership forged in 1992 with the University of Cincinnati, allows veteran teachers to train rookies.
  • School board President Arthur Hull said the district will reexamine its projections.

    "We're not going to spend more than we take in, and we're not going into deficit financing," said Mr. Hull, who declined to comment on the audit. "Some of those projections will be reviewed by our own people. This is going to be a very worthwhile, productive process in terms of responding to this constructive criticism."

    CPS Superintendent Steven Adamowski couldn't be reached. Auditor Jim Petro declined to comment until the audit is released today.

    Cincinnati Federation of Teachers President Tom Mooney couldn't be reached.

    Ohio lawmakers last year ordered the state's 21 largest urban school districts to undergo a performance audit as a condition of spending $113.6 million for such initiatives as all-day kindergarten, professional development and graduation readiness.

    CPS was among the second round of districts to be audited.

    The performance audit compared CPS to three demographically similar "peer" districts -- Columbus, Toledo and Akron. From February through August, auditors studied reports and data about CPS and interviewed and surveyed teachers, administrators, union leaders, area business leaders and others.

    The audit carries no penalties. Administrators are to use it as an efficiency and cost-saving tool.

    Districts are required to perform a self-assessment, or "economy and efficiency plan," within six months of the audit's completion. That plan must be approved by the Ohio Superintendent of Public Instruction. Districts that don't complete a plan face losing state funds.

    Teachers top the audit's list of potential savings.

    CPS teachers are the highest paid among Ohio's 10 largest districts, with an average salary of $54,805.

    Because teachers have smaller classes and access to professional training at the Mayerson Academy, parents and community members should expect improvements in academic achievement, the audit noted.

    But the district is overstaffed, particularly with instructional assistants and librarian - media workers, the audit found. Cutting about 200 such positions would save $5.4 million.

    Mr. Gardner defended the staffing level, saying it increases academic achievement.

    The audit also found that CPS teachers spend less time teaching than their colleagues in other urban districts.

    By contract, CPS' 3,700 teachers can teach up to 280 minutes per day. But nearly two-thirds of middle school teachers and 87 percent of high-school teachers teach less than 225 minutes daily. If administrators required teachers to teach 280 minutes daily, the district could cut more than 120 positions and save $14 million a year.

    Reducing teachers' sick leave -- thereby shrinking the need for substitutes -- could save up to $2.2 million, the audit found. Teachers averaged 6.9 sick days in 1996-97. Substitutes, who worked about 8.5 percent of the total teaching days, cost the district $8.5 million in 1996-97.

    Better record-keeping also could result in immeasurable savings, the audit declared.

    For example, the district doesn't track its assets, leaving its $284 million inventory at risk for loss, theft or misuse.

    While the district has earmarked $37 million for energy conservation, administrators haven't hired an architect or engineer to evaluate savings. Because they haven't quantified savings, they haven't used the money to pay off the district's debt, allowing additional interest to grow.

    CPS administrators also aren't tracking the effectiveness of reforms, the audit found.

    The district could get more money by more aggressively seeking Medicaid funds, the audit found. Healthcare Process Consulting, Inc., which specializes in Medicaid billing for schools, projected CPS could get an extra $867,000 annually.

    Auditors also targeted technology as an area that needs improvement. The district doesn't have a long-term, strategic technology plan to guide it in managing its business operations, student information and instructional systems.

    Administrators also haven't done a Year 2000 assessment, gauging changes needed to update computers for the 21st century. Administrators are working to develop such plans.

    Job vacancies contribute to inefficiency, the audit found. Forty percent of the jobs in the technology department are open -- including the directorship -- hurting its ability to help other district employees.

    The district should create a central staff development program for technological training.

    The audit noted that the district's $19 million transportation costs are low, despite transporting more than twice as many students as some other urban districts.

    The audit urges administrators to reconsider their policy of busing students state law doesn't require them to transport, because that costs the district up to $8 million a year.

    "Simply relying on new tax levies being passed to cover projected deficits places the long-term financial condition of the district in question," the audit says.

    Establishing a permanent Business Advisory Committee would provide CPS with the necessary business advice and leadership, the report charged.

    One parent greeted the audit's findings with an open mind.

    "There's no avoiding the fact that it costs money to make the kind of whole changes that are required in school reform," said Brewster Rhoads, a CPS father of two who has run the district's levy campaigns since 1991. "But every single recommendation that any legitimate auditor would suggest needs to be looked at very carefully. We should leave no stone unturned."



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