INDIANAPOLIS - Indianapolis Public Schools is not facing a $30 million deficit; instead it ended 2013 with a surplus of $8.4 million and $60 million in reserves.
Superintendent Lewis Ferebee released the numbers Tuesday before a school board meeting.
Ferebee had requested the State Board of Accounts and the Council of the Great City Schools to conduct independent audits of the district’s finances to determine if IPS was really facing a multi-million dollar deficit. The State Board of Accounts report found no fraud or misuse of any money.
The state agency’s review was limited to the general fund. It found the fund was handled appropriately, but the agency recommends the district shift to a reporting of an actual budget, rather than a projected budget. Under the actual budget, the district reports what it spends and what it earns.
In 2013, the district spent about $237.8 million and its revenue was $246.2 million, making for a surplus of $8.4 million.
Under the projected budget, which the district has used for years, the school system ended up with a deficit. The projected money woes were fueled by the district budgeting for programs then never spending the money, and often not removing the expense from the books.
In 2013, the IPS projected budget showed the school system facing money problems.
The Council on Great City Schools audit also recommended the district shift to using the budget that shows actual expenses and revenues.
The group also suggested the state’s largest school district reorganize its business and financial department, establish an audit committee to strengthen internal auditing and adopt a fiscal year of July 1-June 30.
IPS' Budget Future
Ferebee said IPS is already taking next steps in efforts to account for its money.
School board members will get monthly reconciliations statements of projected-versus-actual expenditures and revenues, and they will get a quarterly budget update and regularly scheduled meeting.
IPS will also be focused on managing its $60 million in reserves.
The district is being challenged to find ways to invest money that is not being used to cover expenses, in an effort to generate more income.
Ferebee said policies must be established before that could happen. He plans on reaching out to the Indianapolis Chamber of Commerce and Council of the Great City Schools to assist in those efforts.
The district will begin working on its 2015 budget on June 18. Negotiations with the teachers union on a contract begin Aug. 1.
While the surplus places IPS in a good financial position, the district is still looking for efficiencies.
Ferebee said he is interested in leasing out unused buildings to charter schools, and he said there is outside interest in several IPS properties including the Coca-Cola building in the downtown area, which houses the transportation department and other offices, and the TV and radio facility on the south side of the city.
Also not off the table, there is a possibility the district could close schools.