Process Versus Results – Accreditation by SACS explored the relationship between AdvancED/SACS accreditation and academic results for children.  DeKalb County School District has been accredited for years — as have other Georgia districts and schools that fail children, as witnessed by the state’s low aggregate graduation rates (48th out of 50 states).  My Thoughts on the AdvancED SACS Report pointed out that SACS accreditation teams had been visiting the DeKalb County School District (DCSD) for years, examining DCSD on many “standards and indicators,” including the management of financial resources.  Yet, these teams of SACS accreditors failed to find the simple, yet deceptive, accounting practices that I uncovered shortly after coming onto the board.

Do you know what the teams of accreditors (all expenses charged to DCSD) missed in the AdvancED report?  They missed the “mother of all financial problems.”  They said nothing about the accounting methodology used by DCSD.  The third largest school system in the state (approximately the 24th largest in the nation), has been reporting to the board of education using a cash basis.

Why is this a big deal?  For starters, the cash basis will always overstate account balances because it doesn’t include liabilities already incurred but not yet paid out.  The board would then approve budgets for the next fiscal year without a true picture of where the last year ended.   But that’s just one reason the DCSD accounting methodology is a “big deal.”

I’m just a mom with a calculator, but even I know there are standards for accounting methodologies.  The Georgia Department of Education (GA DOE) says that districts should use an accrual or modified accrual method.  The GA DOE’s manual for financial reporting, Section 1, Chapter 7 states:  “LUAs are urged to follow GAAP during their daily accounting and financial reporting.”

•    LUA stands for “local unit of administration” – that’s accounting-speak for “school district.”
•    GAAP stands for “Generally Accepted Accounting Principles.”
•    Governmental Accounting Standards Board (GASB)

So, why would an accreditation agency that has best practices embedded in its “standards and indicators” ever accredit a district or school that used an accounting methodology that did not conform to the GAAP or requirements from their own state’s Department of Education?

Why would the GA DOE continue to allow a district to operate against GA DOE’s own financial manual; using a method that, in their words: “permits distortions in financial statement representations due to shifts in the timing of cash receipts and disbursements relative to underlying economic events near the end of a fiscal period?” (Section 1, Chapter 7, page 2.)

Doesn’t it seem odd to you that these issues were never brought to the attention of the board or the public by AdvancED/SACS?

Since at least half of the state budget is spent on education, shouldn’t Georgia have ensured that the third largest school district in the state was compliant with common accounting standards?  (I’ll blog later about what I learned during a meeting with state auditors.  Meanwhile, consider this:  in all my time being interviewed I never encountered a financial professional/expert; only educrats and one lawyer.)

I contrast the academic and financial failures that I have noted here with the issues that were highlighted in the AdvancED/SACS Special Review Report.  My personal favorite, I have labeled, “The Pronoun Police.”  On page 11, the report states:  “During interviews, board members used pronouns like “I,” “me,” and “mine.”

Were you aware that a school board member has their First Amendment rights curtailed and must refrain from using these pronouns?  Does that seem like a silly thing to note given the major financial and academic issues on which we should focus?  Yet, the report states, mildly, only that academic achievement has declined.  It does not speak to the administrations’ responsibility in said decline.  It doesn’t even address the competency issue at the heart of the academic failures we have witnessed.  But, it was apparently noteworthy to discuss the pronoun usage of board members.

The DeKalb school system has faced significant challenges over the last several years.  These challenges are what motivated me to run for the board.   I took office in January 2011 and was promptly fed a diet of misleading and false information throughout my tenure on the board.  I consistently pointed out the problems I saw.  Just to note a few:

• 7.11.11 Board meeting @ 1:31:48 on the recording of the BOE meeting I note the variances in the budget concerning electricity and legal fees.  Mr. McChesney supports me.  
• 10.03.11 BOE meeting @ 1:04 on the recording I ask about legal fees; @1:05, I note that I continue to “harp” on the electricity issue as we are more than $1 million over-budget; @1:06:11, I ask why we aren’t preparing better budget assumptions; @1:06:39 I am mislead about the reasons the overage has occurred.  
• 1.19.12 BOE meeting @ 1:46 I bring up electricity again.  Mr. McChesney supports me.  Other BOE members try to prove me wrong, saying that the increase is due to rate increases.

As I highlighted in my December 26, 2012 blog, the AdvancED/SACS report states, “The board members’ questions to the staff displayed a suspicion and lack of trust for any information provided by the staff.”  But AdvancED/SACS fails to ask these critical questions:
•    “Why does the staff provide misleading, incomplete or false information to the board?”
•    “What if staff continues to provide misleading, incomplete or false information to the board?”
•    “What if many of those staff members are still employed by DCSD and continue this practice?”
•    “What if some newly hired staff also engages in similar behavior?”

Part of my “take away” from reading the AdvancED/SACS Special Review Report is that accreditation is attached to pronoun usage of board members, as well as their gullibility.  A friend of mine helped put together a “Circle of Trust” graphic that represents what I see as the paradigm for trust within the AdvancED/SACS accreditation best practices framework:

So, to anyone who wants to be a board of education member, make sure you are comfortable with the “Circle of Trust” — or give me call and I’ll tell you what you are really in for.

–Stay tuned for Fun with Policy DJE and Solutions.