IPS and K-12 and Public schools and Education & Workforce Development

IPS chief declares $30M budget deficit a mirage

March 12, 2014

In one swoop Tuesday night, Lewis Ferebee, the new superintendent of Indianapolis Public Schools, made the district’s budget woes vanish.

Ferebee unveiled the results of his analysis of IPS finances by saying a previously determined $30 million structural budget deficit wasn’t real, but was instead the result of a “budgeting tactic” used by his predecessors.

“IPS has over-projected expenses to maintain a functional cash balance,” IPS officials said in a statement released after Tuesday’s meeting of the IPS school board. “The district has operated under a budgeted deficit, rather than an actual deficit.”

Ferebee’s analysis found that the 2013 budget projected $244 million in funding but $274.4 million in expenses, creating a deficit of $30.4 million.

But some of those expenses were for projects that never actually occurred, such as the expansion of pre-kindergarten programs, the creation of a new science school and the hiring of new employees.

The system's actual 2013 expenses totaled $237.8 million, while its revenue totaled $246.2 million.

That produced a 2013 surplus of $8.4 million, according to Ferebee’s analysis, which will be reviewed by an independent accounting firm.

IPS announced it had a $30 million structural deficit about a year ago, when the district was being led by interim superintendent Peggy Hinckley. The budget deficit was the basis for IPS’ decision to lay off 100 employees last year, and it played a role in IPS’ decision last month to terminate 23 administrators.

Ferebee gave no indication Tuesday that any of those decisions would be reversed in light of the new budget, but he did indicate that raises could now be considered for IPS teachers and staff.

Yet, even before the structural deficit was announced, then-Superintendent Eugene White frequently cited budget concerns as he made decisions to close some IPS schools and lay off employees.

In interviews Tuesday night with the education web site Chalkbeat Indiana, both Hinckley and White defended their analyses of IPS’ finances. Hinckley questioned whether Ferebee was jumping to an incorrect conclusion.

“He has no experience as a superintendent and no experience with funding in Indiana,” Hinckley told Chalkbeat Indiana. “I don’t understand how they could have fewer expenditures by that much money.”

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