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Money Found, Money Lost: School Budget Shenanigans

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The murky waters surrounding Richmond Public Schools finances continue to gurgle and swirl as new questions emerge over millions in alleged unspent budget money, and a superintendent's proposed budget that appears to short-sheet the city's elected School Board.

City administration officials continue to withhold $1.4 million allocated by City Council for this year's capital improvement plan budget. Richmond Chief Administrative Officer Sheila Hill-Christian is now seeking further information from school officials on their plans for more than $2.6 million in unspent CIP funds. Hill-Christian first informed school officials in a Jan. 18 letter that the city believed schools had access to the money that they could tap into before spending the $1.4 million.

More recently, Hill-Christian has voiced her concerns about the unspent funds in a series of e-mails to School Board member Carol A.O. Wolf, who chairs the subcommittee charged with complying with the Americans with Disabilities Act.

"Looking at 2006 to the present, there seems to have been some difficulty in spending all of the money in the adopted budget," Hill-Christian wrote Wolf on Jan. 29. "When that happens our staff will recommend that the funds be reduced or reallocated. It is the same thing we do internally when departments have not spent all they thought they would in certain categories.

"Our issue is simply that RPS should spend what they have before requesting additional funds," Hill-Christian wrote.

Wolf says she wants answers because of ADA, but also because of what she sees as a lingering pattern of financial mismanagement that she hopes will end with the new director of finance for city schools, Jim Damm.

"We feel all the time like we don't have money and then we find out that there is money that we just didn't use," she says. She articulated her concern in an e-mail to Damm: "In addition to representing to plaintiffs that we had no money, RPS represented to U.S. District Court Judge Henry Hudson … that we had no money."

Damm, who is researching the question, says he believes there is some misunderstanding over the status of the $2.6 million.

"With Ms. Hill-Christian's letter to the superintendent, there is some information that, in my opinion, she didn't understand," says Damm, who replaced Tom Sheeran as the top school finance official late last year. Sheeran resigned amid concerns over his spending of nearly $700,000 to move a central office department without full approval from the board.

Damm says he's reviewing projects either currently funded or slated to be funded using the money in question, but says his initial review already has found at least $700,000 in outstanding purchase orders for projects to be paid using the money. The remaining funds are mostly tied up in projects that the school system has committed itself to through contracts with vendors that have not yet commenced.

A small portion of the funds likely have been paid by the city to schools but haven't shown up in the figures Hill-Christian was provided because the city's books have not yet been updated to reflect more current figures, Damm says.

City officials aren't so convinced, questioning why projects in the 2006 CIP budget would not yet have been undertaken, and Wolf doubted that explanation as well.

"There's no project that should take that long to complete," she says. "The history of RPS and [the division's] plant services department has been that money allocated for certain projects ends up getting moved from one project to another without the board's expressed approval.

"I'm referring to how monies that had been allocated to take care of ADA improvements ended up getting spent on other things," she says, pointing to Fox and Ginter Park elementary schools and money allocated more than once to install ADA-compliant elevators there. Both schools still lack elevators.

Damm says he's confident that he can prove the schools books are balanced. "We're trying to do things a little better," he says, acknowledging a lack of transparency prior to his arrival. "I just need an opportunity … to sit down with Ms. Hill-Christian and resolve these issues."

But Wolf isn't the only board member frustrated with the school system's finances, and unspent funds aren't the only money matters raising hackles.

Last week, School Board member Keith West, who chairs the board's finance committee, sent an angry letter to Board Chairman George Braxton, expressing "dismay over the Superintendent's Proposed Budget for FY 2008-09."

That budget, according to West, requests $3.1 million less in funding than what is needed to balance the school's overall budget.

"If this budget were to be adopted and executed by this board, we would face removal from office under provisions of the state code which require us to spend within our revenue," West wrote.

"It's a significant issue because the other school systems, their superintendent sends them a balanced budget," West tells Style Weekly, calling Superintendent Deborah Jewell-Sherman on the carpet for what he sees as a dereliction of her duties. "She doesn't want the responsibility of submitting a balanced budget. They've made everybody happy by throwing some money here and some money there. My interpretation is they don't want to cause the pain."

West's assessment mirrors that of Bill Bosher, a public policy professor at Virginia Commonwealth University and former state superintendent of schools who also sat on Mayor L. Douglas Wilder's education committee examining city schools.

"I'm not aware of a school division in the state where the superintendent doesn't give the school board a balanced budget … and then doesn't acknowledge to the school board any needs that haven't been met," says Bosher. "If the superintendent leaves that to the school board to determine that, then the superintendent has abdicated his responsibility in the initial presentation."

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