- The Washington Times - Monday, September 30, 2019

The D.C. Public Schools (DCPS) system is entering the new fiscal year with a $10 million deficit, but the deputy mayor for education said Monday that the budget shortfall will be closed by next month.

Tuesday marks the start of fiscal 2020, and no city agencies are permitted to carry a budget deficit from one fiscal year to the next.

But Deputy Mayor Paul Kihn said that the school system has until Nov. 7 to close the $10.1 million deficit in its fiscal 2019 budget. Nov. 7 is the date that DCPS has to balance its books and submit reprogramming requests to the D.C. Council.

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Mr. Kihn sought to reassure students and families that the budget situation will not affect the ongoing academic year.

“We are the victim of our own success,” he said in addressing the cause of the DCPS deficit.

The school system has retained more experienced teachers than expected. The teachers’ contract requires that they receive pay increases for years of experience, certifications, degrees and overtime.

The DCPS fiscal 2019 budget did not factor in funds for salary increases, resulting in what was originally a $25 million shortfall.

“We have learned a lesson about this particular line item that we hadn’t experienced,” Mr. Kihn said, adding that teachers’ salary increases were taken into consideration for the fiscal 2020 budget.

The universal per student funding formula increased by 3% for the 2020 budget.

The $10.1 million deficit amounts to about 1% of DCPS’ nearly billion-dollar budget. To close the gap, the school system instituted a hiring freeze, cut its central office staff and reduced nonpersonnel spending like supply budgets and cross-agency memorandums of understanding, which are “all intended not to impact schools,” Mr. Kihn said.

“It’s important to understand that this is not final yet,” the deputy mayor said. “We are continuing to work on gap-closure measures internal to DCPS so we can understand the challenges to the city budget.”

The Office of the Chief Financial Officer (CFO) said in an e-mailed statement: “The Mayor plans to resolve the DCPS spending pressure through a reprogramming of underspending in other parts of the budget. In order for the reprogramming to be deemed approved by November 7, it must be submitted to Council no later than October 23 to allow for the 14-day passive approval.”

Council member David Grosso, chairman of the Education Committee, did not respond to a request for comment.

In an Aug. 13 letter to council Chairman Phil Mendelson, CFO Jeffrey DeWitt said the District will end this year with a balanced budget.

“The District has ended each of the last 24 fiscal years with a balanced budget. Be assured that this year will be no different,” Mr. DeWitt said. “In fact, it is my expectation that the District will end FY 2019 with the highest level of reserves in its history and in continued strong financial position.”

But D.C. Auditor Kathy Patterson noted that DCPS had spent 115% of its budget by the third quarter, which she called a “real red flag.” She questioned the CFO’s ability to perform oversight if it doesn’t require DCPS to have a plan to close the gap.

“The final page of the quarterly financial report asks what the plan is to close the gap and in each quarter DCPS filed a report without answering the question and apparently got away with that!” Ms. Patterson said in an email. ” The advantage of having an independent CFO is to have an added layer of accountability and if they are not requiring accountability for deficit spending EACH QUARTER via a gap closing plan, that raises a question about their appropriate role as a watchdog for spending.”

Mr. Kihn said that city officials “have put in place some additional financial controls so that my office and the City Administrator’s office and the Office of the Chief Financial Officer will be monitoring DCPS budget more closely and earlier,” so that the school system’s deficit won’t happen again next year.

He said that he expects the gap in the budget will be zero by the Nov. 7 deadline.

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