Two outside financial audits confirmed what Indianapolis Public Schools Superintendent Lewis Ferebee declared in March: IPS has been operating with a surplus rather than a deficit.
The audits—conducted at Ferebee’s request by the State Board of Accounts and the Council for Great City Schools—confirmed that IPS had a surplus last year of $8.4 million. By contrast, IPS reported a $30 million deficit in early 2013, when the district was under the leadership of interim superintendent Peggy Hinckley.
The different conclusions came because IPS budgeted expenditures for 2013 that were nearly $40 million higher than what the district actually spent. And, according to Ferebee, the district did not do any reconciliation between its projections and its actual spending.
“This also confirms that the budget deficits were a longstanding district practice,” Ferebee told reporters on Tuesday.
The audit by the Council of Great City Schools noted that in 11 of the past 12 years, IPS’s projected expenditures were substantially higher than its actual spending. That left IPS with an average cash balance each year of $57 million, or 25 percent of its general fund.
By contrast, the median cash surplus among 34 school districts that are part of the Council of Great City Schools is 11 percent of general funds.
Those cash balances are maintained in cash accounts, rather than being placed in higher-yielding investments. Ferebee said his staff would work to develop a policy on how much the district needs to keep in cash reserves and, if it holds more than that, to place it in long-term investments.
“We need to invest some of our resources in a better fashion,” Ferebee said.
In spite of the more positive financial picture, Ferebee said he’s moving ahead on various efforts to trim expenses, including the possible sale of IPS busing, warehouse and media facilities. The budget deficit was the basis for IPS’s decision to lay off 100 employees last year, and it played a role in the district's decision in February to terminate 23 administrators.
IPS is working to change the way teachers are paid, possibly paying some teachers more. Negotiations between IPS and its teachers’ union begin on Aug. 1.
Ferebee also said he has started discussions with state education leaders to ask for four "turnaround" schools that were placed in 2012 into the hands of charter schools operators to be given back to IPS.