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APS will cover $20 million funding hit
[May 19, 2008]

APS will cover $20 million funding hit

(Albuquerque Journal (NM) (KRT) Via Acquire Media NewsEdge) May 19--The news that Albuquerque Public Schools would take a $20 million hit in state funding next fiscal year came as a shock to most administrators.

But according to an October audit report from the state Inspector General's Office, the state had told APS about reporting problems behind the revenue loss as far back as 1991.

Gina Hickman, the district's new chief business officer, divvied up the $20 million revenue loss into two categories: $13 million for teacher training and experience; $7 million for special education staff.

APS had been overstating both, which led to the additional funding.

APS blames part of the problem on a computer program that exaggerated the size of its special education staff.

But according to a 2007 audit report, a 1990 state investigation found APS calculating credit hours for teachers in violation of state rules. For example, the district may have counted internships as valid experience or non-education university courses as valid training when it shouldn't have, said Tom Savage, APS deputy of district resources.

A 1991 state letter granted APS a waiver for employees it had already over-credited. But the 2007 audit claims that APS continued using the same faulty methods years afterward.

Savage said APS stopped using those methods in 2001 but never corrected the extra credits it gave employees after the waiver should have expired.

Now that the state has caught the problem again, Savage said, it has made the corrections itself.

APS intends to cover the loss with its cash reserves next year, Hickman said. But that comes with its own costs -- APS had planned to use some of that money to run its new schools.

Lower reserves could also hurt the district's bond rating, which would mean higher interest rates on future loans. And while the cash reserves will get used up in one shot, the expenses they will cover will continue.

"We have solved next year's problem," Hickman said, "but what are we going to do in 2010 and 2012? It's a little more difficult."

She said the district has already cut or saved $4.5 million to help cover the $20 million revenue loss in future years and is looking for more.

Board members have vowed not to cut programs or personnel. During a hearing on the 2008-09 budget last week, incoming Superintendent Winston Brooks suggested squeezing more efficiency out of the district by centralizing more functions such as school staffing.

The 2007 audit also pointed a suspicious finger at the district's Lawson financial software for not allowing APS to record zero years of experience for new teachers. The state worried that teachers with no experience were still getting credited for a year.

Not to worry, Savage said.

He said the program was deliberately designed to record the year of employment a person was in, not how many years he or she had accrued. He said the district always corrected for the program manually before sending the state its data, so that couldn't have contributed to the revenue loss.

Savage said the district did, however, have trouble with another computer program that accidentally doubled its number of special education staff.

"In a nutshell," he said, "we did not catch the error."

Savage said it only happened once, in 2006 -- the year before the audit -- and the district reverted to a more manual approach with additional human oversight.

Don Moya, the state's deputy education secretary, said it was rare for districts to overstate their special education services the way APS did but that mistakes with teacher training and experience were more common.

"School districts all over the state have had problems with this," Hickman agreed. "We're not alone."

But in such a large district, she added, with some 88,000 students and 14,000 employees, the room for error multiplies.

"Everything here is just so big," she said. "There's so much room to screw stuff up. ... There's just a lot of opportunity to not do things right."

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