Trust4Likely you have read of the Hoover Board of Education’s (HBOE) decision to eliminate transportation for all except children with special needs beginning with the 2014-2015 school year.

The decision blind-sided many, myself included, as there had been no public discussion of the urgency of financial difficulty the HBOE claimed drove this decision. Having spent the better part of ten years following revenues and expenditures of the HBOE, I found myself faced with the difficult task of verifying what the HBOE was now telling our school community.

That task is arduous. The opacity of school finance reporting in Alabama is not only daunting, but downright frustrating. There are gazillions of numbers available, but because school finance reporting is at the bottom of the priority list, no one has bothered to create reports that are accessible, meaningful, and understandable. It’s bizarre, really, when you consider that nearly $8 billion of the public’s money is spent on K-12 education.

Trust but verify.

Where to begin? With the memo that claimed that the HBOE had lost $96.8 million in revenue since 2008? The claim that there are now “110 fewer teachers…than…in 2008 on a per student basis” ? The percentage of reduction in expenditures since 2008? When did Hoover City Schools get into such dire financial straits that cutting essential services like transportation was even a discussion point?

These are big numbers and big questions. All of  these numbers and questions matter. All of these numbers and questions are important. Particularly when FY14 budgeted expenditures totaled $167 million, which included a $12 million deficit in recurring operating expenditures. Eliminating buses was projected to only save $2.5 million, or 1.5% of the total expenditures, while negatively impacting 6,925, or 49.9% of the children in Hoover schools who depend on the school bus to get to and from school. (Those projections proved to be inflated. Here are more realistic numbers.)

So the journey began. What follows demonstrates the difficulty in verifying what school officials tell us where money is concerned.

This will likely be a three part series, addressing each of the three big questions about numbers.

It also might reveal why so few posts have been shared here in recent weeks as I have been attempting to verify what we have been told.

For folks who have never taken a dip into school finance waters, the temperature is frigid. Put on your scuba gear. Caffeine is helpful, too.

$96.8 Million in Revenue Loss Since 2008 – How to Verify That Number

This claim was shocking. Where did that $100 million go? Who lost it? Did somebody take it from us?

The quickest way to verify how much revenue Hoover had in 2008 was to look at financial statements. Not budgets. Financial statements.

Boards of education are required to post monthly financial statements on their web sites not later than 45 days after the month ends. Some districts are better than others. Hoover keeps a couple of years of financial statements on their web site. But that didn’t go back far enough.

The next place to look is in a district’s yearly audit. Fortunately, Hoover keeps their yearly audits online (most districts don’t), and I was able to utilize the FY12 audit to pull a whole lot of numbers out and enter them, typing one number at a time, into a spreadsheet. Page 41a of the audit contained the numbers I needed.

That only got me through FY12. For FY13, the budget document was the only set of numbers available. No final numbers, as the fiscal year had not yet ended (it ended on September 30).

Hoover had their FY13 budget online at the time, but school officials have since taken prior year’s budgets off their web site, so I can’t link to it.

NOTE: Always, without fail, save a copy of whatever financial document you are able to view online. It might not be there the next time you go to look for it.

Finding School District Audits

Audits are your best source of financial information. There is little in the audit that will help you with anything other than dollars and expenditures.

If you are looking for a county school district’s audit, those are available from the Department of Examiners of Public Accounts (DEPA). If it isn’t available online, I have found the folks at DEPA to be extremely helpful and timely in sending the reports electronically with a simple email request.

If you are in a city school district (other than the few that are audited by DEPA), you must rely on the district to either have it posted online or to provide you a copy.

What If the Documents Aren’t Online?

What if Hoover hadn’t kept their audits on their web site? What if I couldn’t find the audit online? What would my choices have been?

First, I could attempt a public records request. I say attempt because I have trouble getting my records requests from Hoover answered in a timely way. I have not had great luck with asking for information from other school districts across the state, either.

This would be an Alabama Open Records Request (as opposed to a federal information request, known as “FOIA”), and as such, there is no time limit for the district to respond to your request.

The law governing public records doesn’t address a time limit, and a subsequent Attorney General’s opinion only requires a response be provided in a “reasonable” amount of time (page 7 of the opinion).

As you might imagine, obtaining these types of documents that pertain to a time-sensitive manner can be nearly impossible.

Fortunately, I have discovered where most financial documents are available online. I suppose I should thank the Hoover Public Information Officer for pushing me to find the documents myself. Thanks, Jason.

If You Can’t Find Nor Get Hold of the Audit

If I hadn’t been able to obtain copies of the audit, I would have had to look at the financial statements available on the state site. Buckle in.

Using the pull-down menus for the “Required Reports”, I could pull each fiscal year’s “Exhibit F-II-A (Financial Summary)”. Eight clicks. Then export the file. Three more clicks. I could do that for each year for which I needed financial information.

What you get are big numbers, aggregated into four categories of revenue (state, federal, local and other), broken down across five different funds (General, Special Revenue, Debt Service, Capital and Expendable Trust). Watch out for transfers. They are tough to track.

Expenditures are there, too. Aggregated into the Big Seven:

  1. Instruction (Teachers, coaches…anything that can be labeled “instruction”)
  2. Instructional Support (Student support, local administrators, instructional staff support, and educational media)
  3. Operations and Maintenance
  4. Auxiliary (Transportation and the School Lunch Program are in this category, lumped together)
  5. General Administrative (activities concerned with establishing and administering policy within the school district)
  6. Capital Outlay (Non-recurring expenditures, so you have to take those out to be realistic looking at one year to the next)
  7. Debt Service (long-term)

And let’s not forget my favorite category: Other. There’s always an “Other”. Get used to it. Not very descriptive. But definitely ubiquitous.

That journey should result in your obtaining revenue numbers. So now I had the numbers. And they looked like this. (Remember, these are from Hoover City Schools audits.)

Hoover Revenue Where was that $96.8 million in revenue that Hoover lost? How did they come up with that number?

After listening to the CSFO’s presentation a second time (WBHM kindly put it online), what she said was  IF revenue had stayed at the FY08 level (which was a freakishly awesome year for Alabama’s schools, at least in terms of money), we would have had $96.8 million more in revenue.

Oh. It never existed. The $96.8 million in revenue never existed.

It gets worse.

My numbers didn’t match theirs. Determining the cumulative difference between FY08 revenue and each subsequent year (using FY08 as the basis) only added up to $64.5 million. 96million So I threw in FY13 budgeted revenue to see if maybe that would raise the number to $96.8 million. It didn’t. It still only added up to $85.3 million. 96millionwFY13 That’s a difference of $11.5 million between what the CSFO said and what the audited numbers showed. Verification turned up different numbers.

Here’s an easy fact to check: the memo said “annual revenues for fiscal year 2012 alone were down $31.6 million compared to the fiscal year 2008 level. ” But the FY12 revenue was $152.3 million and the FY08 revenue was $170 million. That’s only a difference of $17.7 million, not $31.6 million. Verification turned up different numbers.

To recap: to find revenue  numbers, look first for the district’s audit. If you cannot view the audit, go to the state’s financial reporting site and pull each report by fiscal year. Plug the numbers in to your own spreadsheet, and….

Shouldn’t it be easier than that?

That ends Part 1. Part 2 will deal with how to verify the Board’s claims regarding the number of teachers employed.