A $34 million crisis of confidence in D.C. schools

By Bill Turque
Washington Post Staff Writer
Sunday, April 25, 2010

Follow the money, if you can.

First, Chancellor Michelle A. Rhee announces that an extra $34 million is available in the D.C. schools budget for teacher pay raises. Two days later, Chief Financial Officer Natwar M. Gandhi declares that not only is most of it nonexistent but also that Rhee is running a projected $30 million over budget in her central office operation.

Within hours, Rhee says an unspecified $29 million has been "identified" to fund the raises.

How this happened, why and how it will be resolved still isn't clear. Rhee and Gandhi are saving most of their answers for scheduled testimony before the D.C. Council on Friday. Hanging in the balance is the fate of the District's $140 million tentative agreement with the Washington Teachers' Union, which is contingent on Gandhi's certification that the pact is financially sound.

The remarkable back-and-forth between the chancellor and the chief financial officer also has parents, teachers, District officials and business leaders asking: Why do the school system's finances appear to be such an impenetrable mess?

"It's a good question. I'm not sure there's a good answer," said D.C. Council member Jack Evans (D-Ward 2), chairman of the council's finance committee.

Gandhi declined to comment for this article. Rhee said in an interview Friday that she accepts some responsibility for the disarray.

"It's unfortunate that we're in the situation that we're in," she said. "But I think it's important to make clear what we have responsibility for and what we don't."

Rhee is referring to the peculiar division of power between the school system and Gandhi's office. A legacy of the District's Control Board era, the law gives Gandhi control over the agency's budget and financial operations. In other words, Rhee runs the schools, but Gandhi -- through a top deputy assigned to Rhee's office -- keeps the books. Information on where the school system stands financially at any given time comes primarily from his staff. Congress established the structure to address chronic financial mismanagement within the D.C. government. But critics say that in the case of the schools system, it has obscured accountability and enabled interagency finger-pointing.

Rhee has clearly signaled that she is using numbers she regards as not completely reliable. At the April 13 council meeting during which she revealed the surplus, council member Kwame R. Brown (D-At Large) asked, "Do you have confidence in the CFO process?"

"We are working with them," Rhee said.

"The answer is no," Brown said.

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