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CFO: Let schools control money

Gandhi floats ‘dedicated taxes’ to fund DCPS

(Published December 3, 2001)

By KATHRYN SINZINGER

Staff Writer

The city’s chief financial officer says he will recommend to Congress that an independent financing mechanism be created for the D.C. public school system and that the Board of Education be given autonomy to control its own money.

In a telephone interview Nov. 30 with The Common Denominator, CFO Natwar M. Gandhi suggested the possibility of using "dedicated taxes" to fund public education here as it is funded in hundreds of jurisdictions across the country – essentially, earmarking some portion of real estate or other taxes as a "schools tax."

While noting that 70 percent of D.C. real estate taxes are already pledged to the city’s general obligation bonds, Gandhi said he is "certainly willing to work with the council, the mayor and the school board to carve out taxes" to directly fund the schools. Gandhi and school board President Peggy Cooper Cafritz said they recently discussed the issue.

Gandhi said he expects to raise the issue when he testifies before the House Government Reform Committee’s D.C. subcommittee at a Dec. 7 oversight hearing on congressional efforts to improve the schools. The subcommittee is chaired by Rep. Connie Morella, a Montgomery County, Md., Republican. The current superintendent of D.C. Public Schools, Paul L. Vance, previously retired after running Montgomery County’s public school system for eight years.

Under current law, the D.C. school board has no taxing authority to finance the schools. The schools, though governed by a partially elected board, must request funding each year from the mayor and the city council. The council’s budget subsequently requires congressional review and approval.

The city’s chief financial officer, an independent position created by Congress during the control board era that recently ended, controls all financial accounting and disbursement for the entire D.C. government, including the schools.

Cafritz said the current financial structure for the schools makes it "untenable" for the school board to hold any superintendent accountable "because [the superintendent] has no control over the finances."

Since early September, when Gandhi announced that a previously undiscovered $80 million deficit had suddenly been found in the public schools’ budget – less than 30 days before the end of the fiscal year, city officials have been scrambling to find an explanation for how school officials could have been operating in the dark. The council and school board have asked D.C. Auditor Deborah K. Nichols to audit the school system’s books to determine how such a large deficit could have occurred without being detected sooner.

Superintendent Vance, whose leadership of the suburban Montgomery County schools was highly respected, continues to maintain that he cannot get monthly line-item financial reports that he needs from the CFO’s office.

"There’s no other way for me to have an intelligent conversation [about school finances] with anyone," Vance reiterated during a telephone interview on Nov. 30. "My expectation is that when we work through all of this, the CFO will have a reporting relationship to the superintendent."

Gandhi told The Common Denominator he has pledged to "personally brief" the school board monthly while problems are being resolved in the working relationship his deputy for school finances, Bert Molina, is having with the board and the superintendent. Gandhi said Molina has distinguished himself in his past job performance and attributed Molina’s problems since he was assigned to the schools in mid-July to Molina being the person who "gave them very bad news of a large deficit."

Councilman Kevin P. Chavous, who chairs the council’s education committee, asked Gandhi on Nov. 19 to replace Molina due to his lack of "a meaningful working relationship" with school officials. Gandhi has declined to even consider displacing Molina from his present assignment until independent auditor KPMG completes its review of the city’s fiscal 2001 financial operations. The final audit report is due by Feb. 1.

Chavous told The Common Denominator he finds the CFO’s response to be "disturbing."

"The school system has no confidence in the CFO assigned to them.... If you know that, you need to change that immediately, because there’s no way you can have the schools work with a financial person [school officials] don’t trust," Chavous said.

Copyright 2001, The Common Denominator