IPS challenges new deficit claim

Ex-CFO: Possible $20M shortfall in 2014

INDIANAPOLIS - Indianapolis Public Schools is facing a $20 million projected deficit in 2014, but officials believe it will be proven incorrect once the actual budget figures are determined.

The district’s former Chief Financial Officer Debra Hineline spoke exclusively to RTV6 after she says she was asked to resign. No wrongdoing was involved.

"Dr. Ferebee’s words, he lost confidence in me. I don't believe anything found was done illegally or against board policy. He wants to make a change and that's his perogative," Hineline said.

On Tuesday, Superintendent Lewis Ferebee released data showing that while the district’s projected deficit for 2013 was $30 million, it ended the school year with $8 million in cash in December.

The superintendent found a budget with projects worth millions of dollars never spent, like the opening of two elementary schools.
 
The unspent figures were not removed from the budget, making it look like the district was facing a financial crisis.

Ferebee says that type of finance report is misleading and he'll report what the district is actually spending.

District spokeswoman Le Boler released the following statement regarding the $20 million claim.

"The deficit referenced in the comments you have shared is in fact a ‘budgeted deficit’ for 2014, rather than an actual deficit. As stated by Superintendent Ferebee and illustrated in the presentation provided during the Board of Commissioners Academic Briefing Session on March 11, 2014, there has been a longstanding practice of over projecting expenditures to ensure that the cash balance is not depleted. We must now turn the conversation from previous practices to focusing on a reconciliation between projected and actual figures. Going forward, the Board and the public will receive the full picture regarding the district’s financial state and be welcomed to the table to determine how we will strategically plan our future."

Hineline joined IPS five years ago. She previously worked at Metropolitan School District of Washington Township schools and was the State Finance Director at the Indiana Department of Education.

She defends the budget in question, considering it was done as required 18 months ago, and says the district may face a tough 2014.

"Yes, there is a projected deficit. It's over $20 million," Hineline said. "Immediate school closings, no. Budget reductions still need to happen because district is projecting to spend more than the funding formula."

The former CFO also adds the school board was well aware they had money during meetings held in February 2013.

"There was no discussion … they knew we had cash on hand," Hineline said.

She believes the best way to improve the money situation is to close more buildings, which she acknowledged is always controversial and emotional.

"I think they have too many buildings for the number of students they have," Hineline said.

The district would not discuss Hineline’s official status with the school corporation.

"IPS maintains its position regarding personnel matters. We will not engage in the discussion of confidential information regarding employees," Boler said.

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