Internal records obtained by the Washington Examiner contradict the statement of a top finance official who said earlier this week the city did not have funds to cover the schools’ proposed teacher contract.
The material came to light during a week of finger-pointing between D.C. schools Chancellor Michelle Rhee and Chief Financial Officer Natwar Gandhi about who is to blame regarding the bombshell revelation of a surplus of schools funds in the same year that 266 teachers were fired for lack of money.
The documents, from the office of the CFO’s schools director, George Dines, show that in mid-March, calculations revealed a surplus in the schools budget of about $34.5 million. Dines told the City Council on Monday, however, that funds did not exist to fund Rhee’s proposed contract with teachers.
A document titled “Pay Raise Resource Availability,” dated March 29, 2010, shows “total available resources” for fiscal 2011 compensation to be more than $381 million, or only $10 million short of what Rhee claimed to need. The extra $10 million would come from a $65 million pool of promised private donations, Rhee said.
A March 29 e-mail from Dines to Rhee tells of “a surplus in available teacher resources for FY 2011 in the amount of $36 [million] to $53 million.”
That surplus, which had been suspected beginning in February, is key to funding the proposed teacher contract, Rhee said. If approved, it would cost about $140 million through 2012 and include pay raises retroactive to the 2007-08 school year as well as the potential for giant bonuses based on student achievement.
Rhee responded to Dines on March 31. “Wow this is great news,” she wrote, before expressing a litany of reservations about the accuracy of the figures. “I am a little worried about drawing conclusions without some deeper analysis.”
But when Dines didn’t respond to the concern, Rhee understood the numbers to be solid, she said Wednesday evening.
“I expressed caution. When there was no information sent back to us to lead us to believe anything but what he’d put on paper, we moved forward,” she said. “After we received information about the surplus, we were never given any information or suggestion that it was incorrect.”
Budget office spokesman David Umansky defended Dines’ Monday comments to the Council.
The council “asked him, ‘Is [the money] in the budget? Is the $100 million that the Chairman used as his number to fund the contract in the budget?’ No. Did [Dines] lie? The answer is no,” Umansky said.
Long before any of this emerged, outside auditors had marked the $738 million school system as a “material weakness” for the city’s finances. It’s a designation accountants use when they think an agency’s finances are so out of control they jeopardize the public’s money.
As late as January, auditors at accounting firm BDO identified the schools’ payroll, run through the CFO, as a “significant deficiency.”
