Op-Ed: State Says SOM Schools Misspent $226,467 in Title I Funds

In late 2012, the State of New Jersey audited the South Orange-Maplewood School District’s spending of Title I funding.  Federal Title I money is supposed to be used to raise the academic achievement of children of low-income families who are “at risk” of failing.

Yet in a 30-page audit report for Fiscal Years 2008-2009 and 2009-2010, the State criticized the District’s spending in more than a dozen categories, ordering the District to return $226,467.01 in Title I funds to the State.

If you didn’t hear much of anything about this, you are not alone.   The audit was briefly mentioned in the Superintendent’s December progress report and at the Board of Education’s December 17, 2012 meeting.  But there has been no substantive public discussion of the matter. 

After reading about the audit in the Superintendent’s progress report, I made an Open Public Records Act request for the audit and obtained a copy in early February.  Following my request, the audit was made available on the District’s website.  You can read the entire document here.

The State’s audit is a mixed bag for the District.  Most of the misspent Title I money was used on programs that many residents would consider worthy.  The largest category of spending was $88,241.36 in FY2008-2009 for the mathematics curriculum audit, the summer credit recovery program, health care costs, grading exams, midterm preparation, and exam proctoring.  Another $79,210 in FY2009-2010 was spent on the summer credit recover program and professional development.  The State questioned this spending on the grounds that Title I requires that the money “supplement, not supplant” state and local funding.  In other words, this money should have been spent exclusively on Title I students.

In addition, the Title I audit reveals that a significant amount of money was spent on what appear to be items that are problematic for a different reason -- their connection to learning for any students, Title I or otherwise, seems dubious.  These items include:

• $10,030.62 for expenditures in FY 2008-2009 without any apparent academic purpose, including toys, Shakespeare festival tee shirts, and bowling accessories, among other things;
  
  
• $2,517.31 for expenditures in FY2009-2010 without any apparent academic purpose, including a $2000 Speaker fee on Race, Bias, and Equity; and

• $26,743.39 for a College Road Trip – “Bridge to Success” - for 37 students (and 15 adults) to Atlanta, Georgia.  

As to this last expense, the State questioned why the students could not have toured local colleges in New Jersey for a fraction of the cost.

In response to the audit and as required by the State, the District has drawn up a Corrective Action Plan with enhanced Title I financial controls.  The District has also appealed $146,451.39, or about two-thirds of the money the State wants back.  This amount represents money that the District spent on the curriculum audit, the summer credit recovery program, and the College Road Trip tour, which the District says was targeted at students who were “at risk." Nevertheless, the District is effectively conceding that $80,015.62 was misspent.  

Without more details, it is impossible for the public to understand exactly what is going on.  To take a minor example, perhaps the bowling equipment was purchased to inspire low performing kids to bowl their way to success.  Who knows?  So two weeks ago, I wrote to Superintendent Brian Osborne and the Board of Education, asking for clarification.  Among the questions I asked were how did this happen?  Beyond the Corrective Action Plan, what steps is the District going to take to prevent this from happening again?  What is the likelihood that the State will audit other Fiscal Years?  And will the audit affect the budget process this year?  I received no response except for a generic boilerplate email.

Aside from the fact that the District is taking a potential financial hit of $226,467, why does all of this matter?  Well, it’s about this year’s tax increase.  The District is facing a $2.8 million budget gap for FY2013-2014.  A host of cuts and layoffs have been put on the table.  A number of Board members have also said that they favor a larger than 2% property tax increase for the School Budget.  Such an increase, combined with a half percent increase for the capital budget, means a total school tax increase that may be close to 3%.  After having been buffeted by property revaluations over the last few years, a tough economy, and stagnant wages, many residents will be hurt by such an increase.  

Anyone who has looked at the School District’s budget understands that controlling property taxes is a challenge because many costs, such as healthcare and energy, are increasing at rates faster than inflation.  At the same, the State’s audit is enough shake residents’ confidence that the tax increase contemplated by the Board of Education has been subject to the proper due diligence.

This Fiscal Year, the School District’s budget will exceed $110 million.  This is the largest component of residential property taxes.  The District needs to respect taxpayers and get this right.  An important first step is for the District to address the recent Title I audit in an open and accountable way.