Tuesday, May 27, 2014

Fayette superintendent says there is no discrepancy in $20 million budget entry, didn't cause financial crisis

This from the Herald-Leader:
The director of budget and staffing for Fayette County Public Schools sent an email Monday to board members, saying a $20 million "irregularity" was the cause of the district's current budget crisis.

The email, provided to the Herald-Leader by board member Amanda Ferguson, said Julane Mullins sent the information about the irregularity to Kentucky Auditor Adam Edelen and Marcia Seiler, Executive Director of the state Office of Education Accountability. Stephenie Hoelscher, a spokeswoman for Edelen's office, said he received the allegations Tuesday and was reviewing them.

"I feel compelled to provide this information to the board to shed light on the facts surrounding the current budget crisis and suspected violations of law and numerous acts of mismanagement, fraud, waste and abuse of authority that have resulted in the current state of affairs," Mullins wrote in the email.

However, Fayette County Superintendent Tom Shelton said in response at a Tuesday briefing that "the allegations in the memo are untrue — mischaracterizations of very routine accounting procedures."

Mullins' email said a $20 million entry into the budget in 2011 was "irregular" because Rodney Jackson, the district's director of finance, made the entry on Dec. 6, 2011, six months after it should have been included.
Because of the late entry, Mullins said, the working budget for 2012-13 was approved by the board with numbers that were inflated by $20 million.

Jackson was in a meeting Tuesday and could not immediately be reached for comment.

Shelton said at the news briefing that the working budget for 2012-2013 was not inflated because of a budget journal entry and that Jackson and other district officials had not made errors.

Neither Shelton nor other district official had committed mismanagement, he said.

However, Shelton said he had asked Edelen's office and the OEA to conduct a full review so the public can be assured that there were no improprieties. Shelton said he thought Mullins' allegations stemmed from misunderstandings. He said the $20 million journal entry that Mullins mentioned had nothing to with the $20 million budget reduction.

Earlier this year, Shelton said he needed to cut $20 million from the budget because the district was outspending its revenues and was draining its contingency fund. That announcement led to months of contentious debate, punctuated by a heated May 19 school board meeting where Ferguson and board member Doug Barnett refused to approve a $426.9 tentative budget that included $19.1 million in cuts. A board meeting has been called for 6 p.m. Wednesday at the district's Central Office on East Main Street to try to resolve the issues before Friday. That's when, by law, the district has to submit a tentative budget to the Kentucky Department of Education. On Tuesday, Shelton said he would provide specific information on Mullins' allegations to the board at that meeting.

Mullins, who said in the email she had worked in the Budget and Staffing office for 16 years and has been the Director of Budget and Staffing for 10 years, did not immediately respond to a telephone call from the Herald-Leader asking for comment about her email.

Mullins said in the email that when she discovered the irregularity, she met with Shelton on October 18, 2012, and showed him the error.

The email said Shelton, after seeing documents about the error, said to Mullins: "Are you telling me the budget for the last two years has been inflated by $20 million with recurring expenses"?

Mullins said she told Shelton that was correct, and once "Tom was made aware of the dire situation on October 18, 2012, he failed to advise the Board or to take immediate and decisive steps to address the critical financial situation that faced the district."

"Instead, he continued to spend as if there were no crisis and with some of the expenditures being in violation of board policy," Mullins' email said.

For example, Mullins said, Shelton granted significant pay raises to Chief Operating Officer Mary Wright and Vince Mattox, School Chief Officer of Community and Government Support, without board approval, and without adjustments in their position descriptions.

Mullins said money was spent for special programs like the STEAM Academy and the expansion of the Carter G. Woodson Academy. She said the district picked up additional expenses for Opportunity Middle College that was previously funded with a grant, implemented a 1 percent salary increase, spent $360,000 for a match for a grant called Spending Money Smartly and spent $80,000 for an administrator to oversee the grant.

"All of these had significant budget implications," Mullins said in the e-mail.

Mullins said she was directed — she didn't say by whom — not to "flag" in documents prepared for the board, a salary increase for Chief Academic Officer Lu Young.

"I did as directed even though this is not consistent with the philosophy of 'transparency' with which Tom indicated that he would conduct the business of the school district," Mullins' email said.

Shelton said Tuesday that any raise he authorized was made with the board's approval. He said that he did ask Mullins whether the budget had been imflated by $20 million but he later determined that no error had been made and he told her that.

At the May 19 board meeting, Ferguson asked Jackson and Wright whether an irregularity had occurred with $20 million in 2011. Both said no. Shelton also told the Herald-Leader that no irregularity had occurred.
Meanwhile, Mullins' raised another issue in the email. She said board policy requires approval for transfers of more than $50,000. But Mullins said in May of 2013 Shelton wanted transfers in his budget in excess of $50,000 to include two $75,000 transfers to NaviGo, a career and college preparation company.

NaviGo was founded by one of Shelton's friends, former Kenton County Superintendent Tim Hanner, who has implemented a pilot program in Fayette County high schools.

Mullins said in the email that Shelton directed that these "budget transfers be made despite the fact that they violated the board policy requiring approval for such expenditures."

Shelton said that allegation was untrue and that he simply paid two $75,000 invoices to NaviGo from his budget.

"I realize that by providing this information to you, the Auditor of Public Accounts and OEA and requesting a full investigation, I risk being retaliated against by the superintendent," Mullins wrote to the board. "I also recognize that under state law, Board members cannot become involved in personnel matters and therefore cannot protect me. While I certainly hope that I will not be retaliated against, I have already retained counsel and am prepared to avail myself of the protections afforded by state and federal law."

Shelton wrote the board an email in response to Mullins' email to the board, saying he has "been made aware of the correspondence that was received by the Board from Julane overnight."

"I am astounded by these allegations," he said in the email, which also was provided to the Herald-Leader. "Please be assured that we will conduct a full investigation and provide a corresponding report in writing related to each of these concerns. If necessary, we can work with the State Auditor's Office and OEA, or any other external investigator as needed."

In regard to the $20 million budget entry, district spokeswoman Lisa Deffendall said Fayette school officials "have already reviewed these entries."

Deffendall noted that Mullins was only questioning the "timing of the entries, not the validity of the transfers or any related approvals."

Read more here: http://www.kentucky.com/2014/05/27/3261409/fayette-school-official-says-20.html?sp=/99/322/&ihp=1#storylink=cpy


Anonymous said...

How do I order a "Lisa Defendall?" I want someone to cover my tracks every time I screw up. I want someone to reassure the public after I make a mistake.


Anonymous said...

We should call him Dr. Spin for all the ways he can spin a story to meet his agenda. What a joke! I can't believe he believes he can easily explain this all away. He must think the families and staff of FCPS are all a bunch of idiots. Trust me, Dr. Spin, we are not! He needs to resign as should Mary Wright, Rodney Jackson and Vince Mattox. What a shameful display.

Anonymous said...

We, several teachers at Cassidy Elementary, believe it is time for Dr. Shelton to tender his resignation.

Anonymous said...

Several teachers at Deep Springs agree with the several teachers at Cassidy. Also please be advised that Deep Springs has only 1 bathroom.

Anonymous said...

I am a Morton Middle School retiree. Glad to be getting out while I can! Tom Shelton, would you like to join me ay pre-retirement meeting?

Anonymous said...

The actual transfer is not in question, Dr. Shelton! It's the results, timing of reporting and actions thereafter that are in question. Save us all a great deal of time and effort and resign. Take Vince, Mary, Lu and Rodney with you!

Anonymous said...

I strongly hope that the School Board members and the Herald Leader will not take their usual "homer" positions and really look at the evidence that will be presented. Dr.Shelton is being paid around $255,000 a year and we have hired someone at $165,000 to do half of his job. This district has so many employees that have seen and live with the utter disregard this administration shows. And these same employees actually deal with children everyday and do a great job. They need someone, in authority, to help them help our students.

Anonymous said...

Thank you Julane Mullins for having the courage to speak up. It's time to stop the cover-ups, bullying, and fraud. As a former FCPS employee at IAKSS (now retired), I know how the system operates by intimidation. For Shelton to say that Julane will not face any retribution--how stupid do you think we are??!!! Pack those bags Tom!!!

On another note-for those folks who contribute to Kentucky Teacher Retirement--Dr Shelton is the Chair of the Board of Trustees for KTRS! How trusting is he??"

Anonymous said...

Beaumont Teachers support our other colleagues. And we support Julane Mullins.

Our district is wicked. Please do quietly, Mr. Shelton.

Anonymous said...

I see such disregard for the students by the administration. They are so wrapped up in what "looks" good, rather than what is good for the students. I am so sick of being told there is "no money" for classroom supplies for our preschool classrooms while we are wasting money right and left on foolishness - and that includes the "extra" classroom days to the tune of $750,000 per year! Teacher concerns are ignored and all we hear about are excuses to build up administrative positions. What a crock!

Anonymous said...

I attended the meeting yesterday as a taxpayer and interested community member. Whatever Rodney Jackson had to say about the $20 million was as inaudible as it was confusing. None of us understood what he said and I don't see how he proved his innocence. He appreared incompetenet and confused. The technology slide show was a bunch of bells and whistles that proved nothing.

I was moved by the parents who spoke up about the special education cuts. Their children will clearly suffer the most in FCPS.

Mike Scanlon gave an inflmmatory speech against critics of the budget and basically said not to trust Brenda Allen. Melissa Bacon did not rule him out of order. Is she a puppet or what?

I think the superintendent is lying, and I continue to believe Fayette County School employees are afraid to speak up at meetings like this.

I'm ashamed of Fayette County Schools and Tom Shelton. I believe in Mrs. Mullins and believe raises were granted illegally to Vonce Maddox and Lu Young.

Thanks, Amanda Ferguson, for not voting for the budget.

Anonymous said...

Did you hear Doug Barnett rip Mike Scanlon near the end of the meeting after Scanlon criticized him and Mrs. Ferguson? Oh my! Mr. Barnett has been right the entire time about the culture of fear and intimidation in the schools and at Central Office and I am thankful that he has been speaking out about it. He has my respect. Hopefully Adam Edelen was listening.

Darrell Perkins said...

If you believe what was said by Tom Shelton and Jackson I have a bridge to sell you These 2 people and the people that surround him are nothing but, "wolves in sheep clothing"! The lies that come out of CO is a joke. Why does Tom have 3 assistants doing his job? They are stealing our kids education at their expense. They are making big bucks to do NOTHING! It's time to ask for the RESIGNATIONS of Tom, Mary, Vince, Jackson and anyone else who has dirt on their hands!!!!