Tuesday, January 15, 2008

Legislative Audit Proves Accountants Rule the World...Or Ought To, Anyway

Last year the Utah legislature wanted to find out how school districts were using the extra Class Size Reduction (CSR) money they had been allocated. The auditor's report was released in December and revealed an accounting horror show.

"inconsistencies", "data discrepancies", "data is not fully audited for accuracy", "staff generally accept that older data is less reliable", "need additional time to research".

These are not audit findings anyone wants to see.

And it looks like it's the Legislature's fault. Accourding to the audit report, in 2003 they changed the rules regarding CSR tracking, no longer making it mandatory to account for the extra money seperately. Not surprisingly, most districts then dumped their CSR tracking systems. In the words of the auditors, "These districts' records identify expenditures but do not tie them back to a specific revenue source, increasing the difficulty of determining how CSR funds were used."

Over 60% of the money allocated to reduce class sizes is unaccounted for. Not cool. Granted, the auditors were able to perform some other tests that suggest that the money was used appropriately, but, again, with good accounting we'd know for sure. It's all about the accounting, people.

So next time you see an accountant on the street, pat him/her on the back and say thanks for ensuring your child gets a proper education.


Ashlee said...

Were you needing a pat on the back Cam? All you had to do was ask. No need to post a huge blog. :0)

Unknown said...

Ah, our wonderful government at work. When will they learn!?

Geoffrey Kruse-Safford said...

As someone who spent not quite a year in the public sector, I can tell you it sounds like the legislature dropped the ball by no longer requiring separate accounting. By so doing, the districts took the money and ran. This is an example of legislative misconduct of the worst sort.

I worked under a state grant, and everything from my salary and gas reimbursement to the purchase of pencils and paper clips - not to mention all sorts of computers, printers, etc. - had a line item and was not part of the overall budget of the agency for which I worked. When I applied for a grant, I had to show how my accounting would hold up under the scrutiny of state auditors and inspectors.

Maybe the legislature figured the local districts, which had perhaps been lobbying for some kind of relief in classroom size, could be trusted to use the money as it was allocated. Big mistake.

Cameron said...

Ashlee, accountants are constantly in need of pats on the back. :-)

Candace & Geoffrey, it looks like it came down to the legislature and perhaps the school districs deciding that the cost and hassle of keeping the seperate accounting system for the CSR money wasn't worth it. There's a section in the audit report that says the committee members didn't like getting inundated with reports and such.

Which can be a valid point. Except of course, when 4 years later you want those reports again.

In the school districts' defense, the tests that the auditors were able to do found absolutely no irregularities in how the money was spent. As near as they can tell, all of it went towards reducing class size.

The truly unfortunate part of the report, though, is that despite the millions of dollars specifically allocated for class size reduction, since 2000 the net gain in teachers was 2. 2 whole teachers. That's not a lot of bang for the buck.

Cameron said...

That last comment doesn't look right. There were two (2) teachers gained since 2000. The formatting makes it look like 2.2 teachers.

Anyway, back to work...

Geoffrey Kruse-Safford said...

If you set up a system by which public monies are being spent for specific purposes, but balk at accountability because you don't want to get inundated by reports - that is some serious lazy, if not outright misconduct. Period. It isn't the legislators money. It isn't the school district's money. It is the taxpayers money, and as the elected representatives of the taxpayers, the legislators have at least an ethical obligation to have a system in place for accounting for it. Especially as, as it now seems, the money was (excuse my Franglish) pissed away.

There is no cost to setting up extra line-items for accounting. School districts all over the country operate under all sorts of state and federal monies that need to be accounted for under various legislation, from NCLB to school breakfast and lunch programs through curriculum support for science and foreign languages. It is disingenuous for either them, or the legislators who may have been shilling for them, to make such an argument. If this is indeed the case, then perhaps the program was implemented without the intention of the money being used to improve classroom size. If so, we can toss fraud in to the mix.

No matter how you slice it, this is just bad legislating, and the complete absence of oversight on the part of the Utah legislature.

Cameron said...

Good points, Geoffrey. It doesn't make any sense for the legislature to appropriate money for a specific purpose and then remove the requirement to account for it. That was kind of the purpose of this post. Without accounting, there is no accountability.

I haven't finished reading the report yet, so there might be more posts on the topic in the future. It came out last Nov/Dec and I've been curious to see what the reaction to it would be. There has always been a tug of war between the legislature and schools over money, with the districts always wanting more and the legislature questioning what happened to the last money they sent. This audit fits right into that discussion.

In this case, it looks like the schools were right. All the money that was allocated to reduce class size was used for that purpose, but because of population growth and poor teacher pay, the money ended up just maintaining the status quo.

Which is not to say that some legislators actually read the report and came to the same conclusion as the auditors and I did. I have already heard reports of them using the news of only 2 teachers being added as a way to say that giving money to schools is a black hole. Which, in this instance, just doesn't seem to be the case. At least not in the way they imply. It wasn't wasted on school administrators, or used for other purposes. The costs of teachers simply outstripped the amounts allocated each year by the legislature.