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Gandhi says Rhee's surplus does not exist

District Chief Financial Officer Natwar M. Gandhi has told Chancellor Michelle A. Rhee that the $34 million surplus she cited Tuesday as a basis for helping to finance teacher salaries under the proposed new labor contract "does not exist."

Gandhi's finding, conveyed to Rhee in a stinging letter late Thursday, is likely to open up a whole new chapter of contention in the tortured history of the contract, which has been in the works since the end of 2007. While his assessment appears to defuse charges that Rhee opted to sock away money for a new contract rather re-hire teachers laid off in October, it clearly undermines the financial foundation of the $140 million deal.

Gandhi told Rhee that while there is a projected $34 million of under-spending in the school operations sector of the current budget, that is offset by an estimated $30 million in over spending in the system's central office operation. In unusually blunt language, Gandhi also took Rhee to task for what he called a failure to adequately consult his office before revealing the surplus at a meeting with D.C. Council members.

"I was incredulous to learn that in your April 13, 2010 presentation to the Council on the contract you asserted that a surplus is available to fund the proposed salary increases based on preliminary information," he wrote.

In the letter, Gandhi described an e-mail exchange last month between Rhee and George Dines, his deputy for school finances, in which Dines mentions a possible source of extra funding from lower-than-expected-teacher salary expenditures. According to the e-mails, which were obtained by The Post, Rhee said more discussion was needed before being able to count on the money to pay teachers.

"We just need to carefully review together any projected surplus before we make any decisions relative to its use," Rhee wrote.

Gandhi said in his letter that "no further discussion has taken place to date."

A 7:18 pm e-mail from Rhee said she was in a meeting but would call back.

By Washington Post editors  |  April 15, 2010; 6:08 PM ET
 
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Next: Rhee's statement on the passing of Brian Betts

Comments

Oh, this is absolutely amazing. I can think of several people who need to be fired right now, and none of them are teachers:
Gandhi
Rhee
Reinoso
Fenty

Posted by: TexasIke59 | April 15, 2010 7:54 PM | Report abuse

Solicitation of YouTube Expert and/or Media Production Studio:

Someone needs to assemble recent video of the City Council testimony and other contradictory press interviews of these Three Stooges of Education Reform. Please include the Three Stooges theme music in the background.

If you were to run for Mayor, could you resist running this ad?

1. Mayor Adrian M. Fenty
aka "Moe"

2. Chancellor Michelle A. Rhee
aka "Larry"

3. District Chief Financial Officer Natwar M. Gandhi
aka "Curly"

This is the brand of slap-face comedy voters can identify with...

Posted by: AGAAIA | April 15, 2010 7:55 PM | Report abuse

Well it looks like the gig is up. THERE IS NO SURPLUS.

What I love most about Ghandi's letter is how he points out that there is over spending (30 MILLION) in the CENTRAL OFFICE THAT MAY CAUSE OVER SPENDING IN THE DCPS BUDGET.

Did someone grow a pair?

Can't wait to see the spin on this.

Posted by: bnew100 | April 15, 2010 8:02 PM | Report abuse

Bill writes, "Gandhi's finding ... appears to defuse charges that Rhee opted to sock away money for a new contract rather re-hire teachers laid off in October..."

Well... Gandhi also states, "In addition, I want to clarify the misstatement that the CFO determines average teacher salaries. That average is a straightforward calculation based on a) salary and benefits information and b) the number of teachers, both of which are determined by the DCPS Human Resources Department through the PeopleSoft system."

So Gandhi is telling us that the "budget miscalculation" was the responsibility of the Chancellor's office. Didn't she blame the CFO?

Posted by: AGAAIA | April 15, 2010 8:27 PM | Report abuse

unbelievable!

is anyone going to come out and reveal the truth? where is the accountability? someone needs to be held responsible for such gross flip-flopping misinformation...

at this point, anything that comes out of any leader (wtu union or rhee's office) can never be trusted.

this is absolutely RHEEDICULOUS!

Posted by: istheresocialjustice | April 15, 2010 8:56 PM | Report abuse

Is it just me or is it curious that there isn't a link to this on the front of the education page? Is the ed board trying to figure out how they will spin this on the editorial page before they link to it? I'm sure the link will appear when they figure out how to spin this for Rhee.

Posted by: Mulch5 | April 15, 2010 10:24 PM | Report abuse

Is it just me or is it curious that there isn't a link to this on the front of the education page? Is the ed board trying to figure out how they will spin this on the editorial page before they link to it? I'm sure the link will appear when they figure out how to spin this for Rhee.

No, the ed board is waiting to hear back from the National Enquirer to see if they will write tomorrow's pro Rhee support piece, the onion said it was over their head.

Posted by: mamoore1 | April 15, 2010 10:34 PM | Report abuse

thanks for the good laughs, guys.

I'm hearing a wild scream from Post hdqtrs, but I don't know if the ed board is tearing its hair out in agony or going into an orgasmic spasm of journalistic delight over the prospect of defending Rhee on this one.

Posted by: efavorite | April 15, 2010 11:22 PM | Report abuse

To the City Council:

In her testimony the Chancellor clearly stated that it was the CFO that was responsible for establishing DCPS Personnel Budgets, and that those inflated numbers led to the RIF's. Rhee also published an open letter to the DCPS Community (April 14th) referring to "the financial information provided to DCPS by the Office of the Chief Financial Officer.”

But Gandhi writes to Rhee, “In addition, I want to clarify the misstatement that the CFO determines average teacher salaries. That average is a straightforward calculation based on a) salary and benefits information and b) the number of teachers, both of which are determined by the DCPS Human Resources Department through the PeopleSoft system.”

Gandhi is unambiguous, and the truth is easily verified. It is the consequences that may be much more difficult to predict. If Gandhi is correct, the Chancellor was a) giving false testimony to the City Council, and/or b) grossly negligent. The future of the proposed labor contract with the WTU is likely to hinge on who is found liable for this “budget miscalculation.” It is not reasonable to expect that teachers will ratify the agreement if they believe that Rhee is at fault.

Additionally, Rhee's disclosure of a fictitious $34M surplus during her testimony apparently shocked Ghandhi and George Dines (his deputy for school finances) as much as the Councilmembers. Regarding Mr. Dines preliminary findings of potential financial resources Gandhi writes, “… you voiced similar concerns about the validity of the initial findings and agreed that further study was required before drawing conclusions.” Gandhi goes on to say that no further discussion took place.

I understand that the Chancellor has worked hard to achieve significant improvements to the DCPS. But these latest misstatements are part of a consistent pattern of endemic failures that have made her school reform efforts a sad impracticable journey.

We should not tolerate any more excuses from a Chancellor that has made personal responsibility for children's education her number one credo. Respectfully, the City Council needs to act in a responsible and forceful manner to protect the interests of our children. I believe that the Chancellor's statements to the Council have provided sufficient evidence to call for a special investigation.

Posted by: AGAAIA | April 16, 2010 6:18 AM | Report abuse

efavorite,
I'm sure after Fred Hiatt and Jo-Ann Armao contort themselves, they will be signing up with Ringling Brothers.

RB&BBC hq is out in Tysons Corner and the circus was just in Richmond.

It's not too late, Jo-Ann.

Posted by: edlharris | April 16, 2010 7:34 AM | Report abuse

So Gandhi is telling us that the "budget miscalculation" was the responsibility of the Chancellor's office. Didn't she blame the CFO?
Posted by: AGAAIA
AGAAIA – Yes, and the WP editorial board further misrepresented this situation. The statements made on yesterday’s editorial page were absolutely laughable. That WP editorial presented just so much clap-trap to have citizens believe that the head of a major department in city government has absolutely no input into or responsibility for their budget. The nerve to attempt to foist blame onto the city council when they are receiving the same information the rest of us get – wildly divergent numbers and “I don’t knows”. There is no way to spin this that undoes the damage. I think we need to disengage from the idea that educational reform is inextricably tied to a particular person. I am hoping that this is an opportunity for our leaders to map out a plan for moving forward regardless of whom is in the chancellor/superintendent/czar’s chair. Let’s see some real leadership.

Posted by: Concerned_Citizen2 | April 16, 2010 9:55 AM | Report abuse

My question is this? Why was there a surplus in "Operations"? What services were lacking? Was the system double funded? (OFM and OPEFM)How was that surplus created? Feedback welcomed!

Posted by: candycane1 | April 16, 2010 4:43 PM | Report abuse

Consider that the negotiating parties, including George Parker AND the Howard U law school Dean, are not fools, but they have made to look like them.
It would be hard to disprove that Rhee's negotiators bargained in bad faith, the better to discredit their counterparts.

Posted by: incredulous | April 17, 2010 12:46 PM | Report abuse

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