01/17/2013 – State BOE Hearing

On 1/17/2013 the State Board of Education held the first of 2 hearings with the DeKalb Board of Education as a body. Due to the holidays, the State BOE was not prepared. The state board subsequently held a second meeting on February 21. This is Nancy Jester’s testimony at the January 17 hearing.

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Nancy Jester
So, I’m a mom of 3 kids in elementary school. And, they go to public school in DeKalb County. When my first child was the only child I had in elementary school at the time, that’s when I decided to run for the board. I ran because what I saw at the time, in 2010, was what I call the twin deficits at that time. We had a credibility deficit with the community. Still have that. And we had student achievement deficits. Still have that. I saw as a citizen and as a parent … I just felt like I had to get involved in reforming those problems because, while I’m the mother of my 3 Jester children, I don’t have the opportunity to give that level of attention to the child. And I worry about the world they’re all inheriting. This is a way to help affect that, because I want to be able to tell my children, I did what I could to make sure you had a stable world, an educated world, a prosperous world where everybody felt they had opportunity. So, I ran for the board and I was fortunate to win. And I appreciate the privilege to serve.
I brought with me the thought that we have these twin deficits. When I came to the board, and you start peeling back the layers and becoming part of the entity and learning what your packet looks like, what you’re reviewing. You peel back more layers and I became very well aware of the developing budget crisis that really set my hair on fire I thought at the time. And I did alert my board members to it. I spoke at almost every single board meeting about it. I received some support, some … mostly it was just a calm silent running. This goes over from another administration into the current administration. I saw what I consider deceptive budgeting practices, certainly unsound budgeting practices. And I began to look into that and ask questions.
This dove tails into some of the questions you’ve asked about what kind of training we could have that would be better. I have some thoughts about that and I’ll get to that in a second. When I would ask questions, I would be misled by staff. And I have the dates and times. You can check the tapes. I would often ask about why we were over budget on this item or that item, those explicit items that are mentioned in the report. That comes from me. That comes from the work that I did on those issues. And, I got answers that demonstrably were false. I was often told, well it’s a weather issue. But, it couldn’t have been a weather issue because our expenses in those areas were remarkably consistent over 5 and 6 years. So, I didn’t understand why you would budget so much lower than what you knew you were going to have. I didn’t get a lot of traction on the board with that.
So we progress. We have a new administration. And I will say this is one area where I know, going forward, I’m feeling more confident about the board and the administration. I will give kudos there. Our fiscal year ’13 budget has realistic assumptions in it. And, I give credit to the new Superintendent and her new CFO. So, we have a new financial team. I think, professionally, they seem to have an understanding of this. The budget is reality based. Whether any one particular item is something I like or don’t like, the budget is reality based. And, it’s not built to have these sorts of deficits either way in the accumulated reserves that have been built over a long history of the district.
What the report didn’t say, and I wish it did say, and it’s another area where we are improving. But, it should have been stated that we have been operating on a cash basis of accounting in reporting to board members on a monthly basis. And this is very risky. I think that as board members, boards that predated me, so I came on in January 2011, what we saw was an overstatement of what reserves would really look like. They’d make a budget based on that rosy scenario, and you would basically see the whittling away of reserves. And that’s how we got to the place we got to. And, so I was concerned about that. I don’t know why that wasn’t mentioned in the report. I do think it’s worth noting our new CFO is moving us to an accrual or modified accrual based system. So, I’m very pleased with that because, for fixed liabilities, those salaries, at the end of a fiscal year but accruing back to that year need to be in there. You need to book that liability. So, we’re doing that and I’m happy about that. And we have those realistic assumptions.
I’m certainly committed as I have always been committed to moving the district forward. I am committed to continuing to be a watchful steward of the finances. Continuing to make sure we’re aligning our resources to answer these twin deficits that I saw when I came on the board, student achievement and credibility with the citizens of DeKalb. I think we made some motions in that direction. We have a long way to go to get there. So, I’m certainly committed to being collaborative and working to customize a solution that I think fits a lot of the unique problems we have in DeKalb.
I wrote down, we’re in an iPod world so we have to toss out the 8 Tracks. And, that’s, I think, one of the biggest challenges facing us. We have to change the culture. The culture was ??? It must change. It’s gotta be different. And this isn’t … that part isn’t necessarily unique to DeKalb. I know a lot of school districts … are struggling in making these changes too, but it’s particularly profound here. And it’s just really highlighted by the fiscal challenges we’ve encountered and faced.
So, in particular I’m struck by our graduation rate. And, this is a state issue as well as a DeKalb issue. And the new calculation methods laid bare where we are. And it’s particularly profound in DeKalb. So, I’m definitely committed to that, because I think to not urgently address it is inherently leaving not a stable and prosperous environment for all of our children.
And I’ll just go ahead and answer the question that has been posted to several of our board members about training, what kind of training would help. We started, actually, to have this type of training and we only had 1 session of it. I always wondered why … and I asked about it … we need to do this again. Which was training cross pollinated with staff. We’ve had a lot of board training. We’ve had a lot of leadership training. We all do our GSBA things. But, part of the problem is rapport building with staff. Because, we do have a situation where we have had staff, like I said before, I’ve had staff give me inaccurate answers. So, we have new people in and you’re trying to build a rapport. But, you’re also dealing with the history. They may not realize the history that … and the credibility issues that, when you’re coming from out of state, you a new hire. So, we have to address those credibility issues and that means, sometimes, we do have to ask … we have to go through the process of building this rapport so that the public can see and we can feel comfortable about the credibility the new staff is bringing in. Which, I do see, especially with financial rapport. So, I think that cross pollinated training with staff, we did one session of that. I loved it and found it real insightful. It gave me some interesting … understanding of staff members. I think we need to do more of that. So, that would be my answer to that question. Not just generic leadership training. And possibly cross pollinated with financial management because I realize it’s hard to read budgets. It’s tough, it’s some people’s bailiwick and just not others. So, I think some training there, specific to our budget and how we report would be very helpful.
The Superintendent did have a meeting where she brought in the state auditors. I thought that was very illuminating. It solidified some of the things I had thought about the auditing process and what it did and didn’t recognize. And, why some folks felt a little more confidence about the audit reports than maybe they should have. Again, I think training would help out. But the cross pollinating of staff and board training would be helpful. So, that was just … I wanted to talk about that question.
Again, I’m fully committed to continuing to be watchful what we really have are three deficits now going on in DeKalb. And, I’m mindful to remedy those situations.
You said you had several interactions with the staff, particularly about maybe financial questions. Did you ever ask about the $12 million dollars … that had been drawn from the line of credit of textbooks?
That particular line of credit was approved in 2009. So, that predated me on the board by two years. I was not aware of the situation with the textbook line of credit, lease, it’s referred to in two different ways, until the new superintendent brought that to my attention. They are digging through that right now to understand what that money was used for, and that is incredibly troubling. And, this goes back to trusting. I spoke with a former board member who was on the board at the time. And, he said, you know, I didn’t think to ask are you going to use the money for something besides textbooks, because it was called a textbook lease or the textbook line of credit. So, I trusted that that was indeed how it would be use. I believe that they are going through that process right now to remedy that, to understand what happened there. So, I give kudos to the new superintendent about that. I have certainly followed up with questions about that, spoke about that … since yesterday with some folks. Because, I did routinely speak within months of coming on the board about what I saw as the budgeting practices that were problematic.
So, you don’t know anything more about the $12,000,000?
I’m waiting on that report. I don’t have a full briefing on that. I await that. I know that they are still, the CFO and his team are still reviewing that. They do not have the full report for that yet, but that’s very troubling.
Ms. Jester, you mentioned that you came on this board on January 3, 2011. And, I know from our board work, ??? that you were I assume buried in the process in January 2011.
That’s right. I was sworn in on January 3, 2011.
So at that time, that same month, is when DeKalb would receive the first report from SACS.
In fact, the first or second week I was on the board, I had an interview with SACS. And, obviously, I was very new to the board at that time. We received the report that really dated back to 2010.
So, this report tells us that SACS gave us a report in January 2011. They did a follow up review in Oct ’11 and March ’12. So, through your eyes as a somewhat new board member, or at least new at that time, if you can speak to your perception of how the leadership, superintendent and the board at that time reacted to … What did they do with that report and those required actions?
I think everyone is very diligent at looking at it and thinking about it. I think that everyone has good intentions. It’s the actions. I mean, I’m an end gamer. Where are we going to finish and how are we going to get there? And, I think certainly the board has fallen short of that. Clearly we have. We have made some gains in some achievement levels, but we have a long way to go. What I was disturbed about in the reports, actually, was that in those interim times when we were doing reports, I had been speaking about the budgeting issues and they never brought those to light. In fact, I think they would check those off as operational … our budgeting issues or financial status. That always perplexed me. But, I was undeterred and continued to bring it up to the board for the board’s attention. And again, I’m happy our Superintendent, our current superintendent, has addressed that.
I don’t feel that the interim superintendent addressed that. The only thing the interim Superintendent did well was start a policy review process. That was something she did … Before I came aboard I remember observing that in 2010 and I thought she came up with a robust plan for doing that. Because that was one of the issues that SACS had had in 2010 which was … you have some old policies. You need to go through and modernize what you have. So, she came up with a very good system. I feel good about that, but not so good about addressing financial issues. I wasn’t seeing at that time, in 2011, I didn’t see … I wouldn’t say I had evidence of academic achievement being targeted … that deficit. And really the public engagement credibility issue.
So, when you, I believe I heard you say, you almost immediately became concerned about the financial problems … Did you try to talk to your other board members?
Yes, Ma’am.
Do you think they just …
Well, I faced challenges there. It was clear to me, and I tried to explain why I believe it was clear. I wasn’t successful at convincing a majority to look into that or the staff, perhaps either at the time the financials staff at this point. Some board members tried to disprove me. Some board members tried to say it was temperature differentials and rate increases. But, rate increases and temperature differentials didn’t account for 50% increases or being 50% over budget.
Thank you.