- The Washington Times - Friday, September 7, 2001

The D.C. public schools budget has a $38 million deficit one month before the end of the fiscal year because of overspending on special education, transportation and utilities, city officials said yesterday.
D.C. Chief Financial Officer Natwar Gandhi and schools Superintendent Paul L. Vance said during a news conference that the school system's failure to collect Medicaid revenue also contributed to the deficit and that school budget cuts are imminent.
Officials initially determined the school system had overspent by $80 million, but financial officers have come up with $42 million by freezing spending and procurement requests, and tapping into the city's surplus.
Closing the deficit will require a "draconian austerity program" for the school system's fiscal 2002 budget and will affect students in the long run, Mr. Vance said just two days after schools opened in the District for a new academic year.
Six senior city officials, including Don Rickford, chief financial officer of public schools, have been fired for failing to report the overspending until late this year, Mr. Gandhi said. He said they have been replaced with "seasoned professionals with direct experience dealing with large city school budgets," including Bert Molina, who takes over Mr. Rickford's position.
The $80 million deficit includes overspending of $24.6 million in special education, $6.1 million in special-education transportation, $8.6 million in utilities and $38 million in Medicaid-revenue shortfalls.
School sources said a private contractor who was hired to collect reimbursements for special-education children by Medicaid failed to do the job, and Mr. Rickford failed to oversee the contractor properly.
"We were not aggressive enough to do billings on the Medicaid front," Mr. Gandhi said.
School officials said the deficit came as a surprise because officials in charge of spending had not alerted them in time. "We didn't know until the last 48 hours that we were talking of a deficit of this magnitude," school board Chairman Peggy Cooper Cafritz said.
Mr. Vance said the school system would start looking immediately at budget cuts. "I will meet with the school board and discuss proposals and austerity issues," he said.
While refusing to elaborate on where long-term cuts would be made, Mr. Vance said they would mostly be at the central office level.
Mrs. Cafritz ruled out cuts in teachers and other school staff. "We will work to make the effect felt as little on classrooms as possible," she said, adding, "We can't say there won't be any."
School officials said their hands were tied on spending in special education. Two class-action lawsuits are driving the school system's policies and spending on special education and transportation, Mr. Vance said.
"As long as you have the tension between the deficit and the court mandates, it will be hard to keep the string from popping," Mrs. Cafritz said.
Under a court order, about 4,000 special-education students are placed in private schools outside the District's school system, and the District pays approximately $10,000 per child.
Mr. Gandhi said money to resolve the $38 million deficit would come from the city's budget, but D.C. Council sources were not optimistic.
"They cannot have a deficit, and they cannot have more money," said Willie Lynch, spokesman for council member Kevin Chavous, Ward 7 Democrat and chairman of the education committee.
"I don't know how in the world they managed a deficit this large. This will be painful."
The announcement comes only weeks before the D.C. financial control board is to dissolve because the city balanced its books four years in a row.
"It brings up an interesting question," Mr. Lynch said. "If our books aren't balanced, they're back."

Jabeen Bhatti contributed to this article.

Sign up for Daily Newsletters

Manage Newsletters

Copyright © 2020 The Washington Times, LLC. Click here for reprint permission.

Please read our comment policy before commenting.


Click to Read More and View Comments

Click to Hide