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The $34 million question

So does the $34 million surplus Chancellor Michelle A. Rhee described to the D.C. Council Tuesday actually exist?

This is the money she said was now available in the FY 2010 budget, three months after laying off 266 teachers, to underwrite part of the five-year, 20 percent pay package in the proposed labor contract. It's ultimately up to Chief Financial Officer Natwar M. Gandhi to make that call.

Rhee said again Wednesday night that she has been assured by a staff analysis that the cash was there. But e-mails obtained by D.C. Schools Insider show that as recently as March 31, one week before the tentative agreement was announced, Rhee was raising significant doubts about the existence of the windfall.

On March 29, she received an-email from George Dines, Gandhi's assistant assigned to DCPS. He reported evidence of a surplus estimated between $36 to $53 million in the schools budget for FY 2011, which begins Oct. 1.

"The analysis shows that we are budgeting more for teacher compensation than actually required," Dines wrote. He said the figure established by the Human Resources staff to derive average teacher salaries ($84,026) was significantly out of line with projected spending ($73,356). "This is a significant difference," Dines said.

He concluded: "Please note that this difference has occurred in FY 2010 as well, with a higher amount for the development of the FY 2010 budget with a similar lower actual salary."

Rhee was pleased but circumspect: "Wow this is great news but before we get too happy, we need to sit to make sure that we are on the same page relative to salaries prior to the FY 11 budget hearing,"

Then she said: "I am a little worried about drawing conclusions without some deeper analysis. We have gone from having a $70 million surplus in FY 09 to needing to to needing to use the FY 10 advance to avoid a deficit in FY 09. Similarly, the FY 10 projections you shared with me about two weeks ago (where you said we had a surplus of about $40 MM for the same reasons as stated below) were based on incorrect assumptions about the size of our teaching force. After we reviewed the correct numbers you said we, in fact, did not have that surplus."

Rhee ordered up a bunch of new data that she said was needed to make an informed judgement. She also said that she wanted to meet with Dines, and that she would ask her labor relations deputy, Dan McCray, and human resources chief Pete Weber, "to sit with you prior to our meeting to walk-through your work and data files with them."

"Again, this could be good news. We just need to carefully review together any projected surplus before we make any decisions relative to its use."

Rhee said Dines eventually produced a revised analysis showing a surplus of between $34 million and $44 million.

So why did Dines tell the D.C. Council under oath on Monday that there was no money in the budget for the teacher raises? Rhee said she could not speculate. Dines' cell phone mailbox was full Wednesday night and he also did not respond an to e-mail.

By Washington Post editors  |  April 14, 2010; 10:11 PM ET
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Next: DCPS enrollment projected to inch up next year


Mr. Dines,
meet Mr. Wepman.

"I'm not the only soul who's accused of hit and run
Tire tracks all across your back
I can see you had your fun"

"Crosstown Traffic" by Jimi Hendrix

Posted by: edlharris | April 14, 2010 11:00 PM | Report abuse

This is really going to throw a wrench into the works of the Anti Rhee crowd.

A) If they want to believe this, then there is no way she masterminded the RIF, but then there might also not be money for raises and thus the contract might be dead and they keep their jobs
B) If they dont believe this, then they can keep up with their conspiracy theories. But then there IS money for the raises, which increases passage of a contract they dont want.

I think job retention is more important than spewing crazy theories. So they might as well believe this. But you never know with these people. Cake: to eat or to have?

Posted by: makplan20002 | April 15, 2010 12:28 AM | Report abuse

Nice try, makplan2002, but someone who plays so fast and loose with MILLIONS of dollars and hundreds of teachers' jobs is not going to be excused for this mess. Your letter shows that the blind Rhee rheear-end kissers will go to any length to defend their gal. These are citizens' tax dollars we're talking about, not some bag of money Rhee finds on the street when she's out trolling for private dollars. I want agency heads and politicians who treat CITIZENS's money with respect.

Posted by: dccitizen1 | April 15, 2010 5:34 AM | Report abuse

The $100,000 question is liar or incompetent?

Posted by: edlharris | April 15, 2010 6:21 AM | Report abuse

School Reform by the numbers…

Fenty is stating on his Thursday morning local TV circus that the RIF's were the result of a $20M cut imposed by the City Council to a budget that had to be balanced.

The FOX news anchors pressed him on the "miscalculation" reported by the Chancellor in her testimony yesterday as being the cause of the 2009 budget crisis. Fenty danced all the way around the issue, saying that he does not know the specifics, and ignored questions about rehiring RIF'd teachers or making additional compensation payments to them. He then repeated that the cuts were made in reaction to the $20M cut mandated by the City Council. Really?

We need to know if Fenty is telling the truth here. He clearly knows more than he is saying, and if he has not asked the appropriate questions of the CFO's office and Rhee he is deliberately ignorant and negligent. Also, we need to know if anyone at DCPS told the City Council before this morning that this supposed $20M cut was going to cause these RIF's or any other significant reductions in services or programs.

Otherwise, it is incredible that Fenty has the audacity to blame the Council for this mess. Again, it is the mayor and Rhee that have operated in secrecy, and then blamed others for the harsh remedies that they claim they were reluctantly forced to impose. This story cannot be allowed to end here.

At what point are the press and citizens going to recognize the game of "Three Card Monty" (Cantana's description) that Fenty/Rhee have been playing with the budget in their presentations to the City Council. This must thoroughly investigated.

School Reform? No... Reform School is a better description.

Posted by: AGAAIA | April 15, 2010 8:17 AM | Report abuse

This article clears up some problems I was having with the math on this. I couldn't see how an $11,000 per-teacher annual overestimation could lead to an $80 million swing in an annual budget item. Now I read that the miscalculation was actually over two fiscal years, so it makes a little more sense: $11,000 x 4,000 teachers x 2 years. Adds up to $88 million.

The overarching rule is this: corporations rise and fall on market forces, and government bureaucracies rise and fall on how credible their budgets are.

Posted by: gardyloo | April 15, 2010 9:16 AM | Report abuse

The 2011-12 budgets are based on these same numbers ($81,000 plus) for teachers.

Let's move forward with the same bad data. Let's excess teachers from schools using this same bad data.

This is happening as we have this discussion. Go the the DCPS website and check Budget and Finance link. Proposed 2011 budgets are listed.

Posted by: dccounselor72 | April 15, 2010 10:03 AM | Report abuse

The bigger problem is that DCPS budgets are calculated on salary averages instead of salary actuals with a percentage tacked on for benefits. In private industry you deal with actuals when you project salary data.

Now...I'm not necessarily a Rhee fan, even though I concede that some things have improved under her, but, DCPS budgets have been done this way for years. No other industry would be able to survive on averaging budgets all willy nilly like this. Don't just demand next year's budget. Demand the past 10 years when schools were falling apart and not opening on time and children were being shifted from school to school. Teachers were working without raises and supplies. There were no books. And....many of the same outraged council members were sitting on the council at that time, approving budgets, under this same process.

Now I'm not saying not to hold Rhee or Fenty accountable. I'm saying hold EVERYBODY accountable. This is nothing new. The outrage is that more than 266 teachers were affected. The shame is that 266 teachers and children for decades have been affected. This is a broken system!

Posted by: trying2bbetter | April 15, 2010 10:49 AM | Report abuse

I listened to the Fenty interview on Channel 5 new and I felt sick.

I cannot believe the bold face lies this man is willing to let come out of his barely moving lips.

He must practice this over and over again.

God, let this nightmare come to an end.

Posted by: dccounselor72 | April 15, 2010 1:35 PM | Report abuse

Rhee and Gandhi both should have been fired yesterday. Rhee for not knowing what her expenditures are and Gandhi for the crappy performance of accounting, forecasting and tax office scams in his department.

Posted by: snake_taylor | April 15, 2010 3:53 PM | Report abuse

Boy, I tell you: the Washington Post's op-ed's are riddled with grammatical errors and typos these days. Spell and grammar check are free!

Albeit, I appreciate the transparency, we all know, still, how corrupt DCPS and Fenty's administration are. Anybody imbecilic enough NOT to see $34 to $44 MILLION dollars in any budget should not have a finance job. Who, in their right minds would say, “My bad, we didn't know we had that much money until now?” What is wrong with the District of Columbia? One thing is for certain: we can't blame Michelle Rhee, single-handedly, for this mishap. A lot of people are responsible for this and should face some kinds of consequences. Not knowing is not OK.

Posted by: rasheeedj | April 16, 2010 5:37 AM | Report abuse

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