Tuesday, November 18, 2008

Larry Lewis and the incredible shrinking fund.

Okay, at the end of the 2005-06 school year (August 2006) the audit team from Judd Thomas and Smith found Larry Lewis had drawn down the cash fund balance in the general fund to $274,000. The problem was generally blamed on CFO Eugene Smith.

In 2006-07 the general fund went negative by about $3 to 4 million, which was disguised by a "bridge loan" of six million. The cash on hand appeared positive, but Larry Lewis left the Lancaster ISD actual cash balance , according to TEA investigative review,was negative by about $3 million.

In 2007-08, the year just ending, the district expenses exceeded projected revenue by another $3 to $4 million dollars. The spending was not so excessive that year, but the revenue was short because the attendance rate did not meet Dr Lewis's projections. The annual compliance audit is only beginning. But it appears the cash on hand in the general fund for the year ending August 2008 will be in the red by about $7 to $8 million.

The coming year, school and fiscal year 2008-09, the district has over-hired by at least eighteen teachers -- a $900,000 excess expense over budget. The attendance rate in Lancaster is still falling, and the revenue is about $1.8 million short of projections. If nothing is done, the ending fund balance will accumulate a $10 million debt.

It will be interesting to calculate the rate of debt to the "rise" in TAKS test scores. How much does it cost to rise in the ranks from last place in 2006 to, uhm, well, wherever we are now?

Larry Lewis will no doubt argue that "all districts" have secret payday loan operations, pay unbudgeted awards to favorite employees, and generally ignore Texas law.

He may even be correct.
"Dr Lewis should no longer serve as Superintendent of this District. He has abused his position, committed unauthorized and illegal acts, was dishonest in this investigation, abdicated his leadership duties, and repetitively failed to notify the Board about critical information."






The "Jones Report" continues - pages 4 thru 6 below










The first three pages of the twelve page "Jones Report" on LISD superintendent Larry Lewis.











Saturday, October 25, 2008

"Buildings don’t teach kids. People do. "

Somebody better tell Scott Milder about this.

We should invest much more in ensuring that we attract, retain, and motivate the best people as teachers rather than in "21st Century" facilities (whatever that blather means). The systematic evidence overwhelmingly shows that the quality of school facilities in the United States has no relationship to student achievement, while the quality of teachers is very strongly related. In the Handbook of the Economics of Education, Eric Hanushek reviews all of the research meeting minimal quality standards regarding the relationship between school facilities and student performance. He identifies 91 analyses on the issue in the U.S. and finds that 86% of them show no statistically significant relationship. Of the remaining 14% of analyses that did show significant effects, 9% were positive and 5% were negative.

Meanwhile, Dallas Observer journalist Jim Schutze is begging taxpayers to "Take Back Your Schools" from the construction industry.

Regarding the Dallas ISD budget fiasco and their bond program, Schutze writes:

Don't let me give the impression that school board trustees are lambs led to slaughter. Many of the same names—people who make money from public works projects—march through their campaign contribution lists like tin soldiers: Aguirre and Alcantar are frequent contributors, along with William Solomon of Austin Industries; Henry C. Beck III of Beck Group Construction; Arcilia Acosta, CEO of Carcon Industries and Construction; and Ron Steinhart, a director of the huge cement company TXI and many other stalwarts of the public works industry. Solomon, Beck and Acosta are not among the business foxes who have volunteered to come down and watch the poultry.
Look, I'm not saying these men should not support the schools. But there are three things I definitely do want to say: 1) Too many of these guys have overweening interests in the school bond construction campaigns; 2) they have a damned lousy track record of success for their manipulation so far (Yvonne Gonzalez, Waldemar Rojas and the current meltdown, for example); and 3) there are plenty of other people around town (including maybe a couple of women) who could come at this from a far less compromised perspective.


Schutze also mentions, in passing, our good mayor's father's company, Pegasus Projects, "which was hired by the school district to oversee the entire $1.3 billion 2002 school bond construction project" ...

Mayor Knight is deeply interested in helping Lancaster schools. He served, for instance, on one of the (several, recently) bond planning committees. (That's not a great recommendation by the way. So did I...)

But of the 200 or so students forecast to attend Lancaster ISD who didn't show up -- Mayor Knight's are among them.

The problem is always spending more money on fancy schmancy buildings that show off an administrator's "edifice complex" -- and less on hiring and retaining good teachers.

Here we go again.

Thursday, September 04, 2008

Lancaster's answer to Jimmy Olsen, the intrepid Bill Conrad, wrote about the LISD budget:

http://www.todaynewspapers.net/articles/2008/08/29/lancaster/news/lnnews1.txt

The district didn't meet the TEA recommendation of 65 percent of funding going towards instruction. In the final budget, 58 percent of the funding went towards instruction. As a result, the board passed a resolution acknowledging the issue and the district will be required to post its check register online.

Anybody who noticed which trustees moved, and seconded, that resolution? Anybody record the vote? Did anybody happen to see the display of the verbiage of that resolution projected up on the big screen TVs there in the Lancaster ISD board room?

Dr Lewis assured the trustees that a draft of the resolution was in their "packet" along with the budget.

The budget was moved for approval by Ed Kirkland -- who made no mention of the resolution. Perhaps he was deliberately trying to set Carolyn Morris up; to show her the fool and not come back for the resolution.

On the other hand, perhaps Morris moved on deliberately, to show Kirkland as the fool for not including the legally required resolution in his motion to rubberstamp Dr Lewis's latest proposal.

It's odd though that in a room full of Trustees, highly paid administrators, a state-appointed conservator, the district's hired legal advisor, and at least one local attorney well known as a critic of district sloppy disregard of the law and parlimentary procedure; nobody noticed the omission.

That is, if it WAS an omission. Bill Conrad heard the resolution approved, and the official paper of record for all LISD matters reported it DID get approved. So maybe it happened so fast and so subtly that audio/video records couldn't keep up.

Friday, August 22, 2008

In San Antonio ISD, no money is missing. It's all been accounted for.

You okay with that, now?

Sunday, August 17, 2008

Why did Cheryl Wright resign in August after taking her seat in June?

Was it because of the hate mail she got from the old, white, "Historic-Lancaster-on-the-Square" elite -- who called her names for supporting Carolyn Morris?

Was it because of the screaming insults she got from the large, black, male official entitled to join in "deliberations" in the executive conference room -- who later explained that "trash talk" is just "part of the culture"?

Was it fear, actual or foreseen, of the harassment the children she still has in the local schools were might get as classes begin this month?

Was it confusion over the morass of budget paperwork, still incomplete when distributed to trustees, still being revised under conservator Jim Damm's direction the night of the first budget workshop -- and the crushing responsibility of trying to vote on a $40-$50 million dollar mess that can't even be documented, let alone believed?

Was it simply that her husband's business's regular bookkeeper suddenly left, and that Ms Wright's financial skills were needed on the home front more than in the Lancaster trenches?

I dunno.

I bet, however, that hate mail, screaming, child harrassment, budget concerns combined to make ordinary business problems look a lot less troubling than they might otherwise have been.

And I sure hope Frank Mejia doesn't decide his business's books suddenly require his wife-partner's full time undivided attention, too.

Saturday, August 16, 2008

A river in Egypt.

There is a interesting denial that just keeps floating around. What makes it interesting is this denial addresses a charge never, to my knowledge, made.

Senior leadership officials at the Lancaster school district deny that any money has ever been STOLEN.

Okay, cool. I actually believe that.

Now, I also believe CPA auditor Andrew Moore of the firm Judd Thomas Smith and Company when he tells the board, as he has for the past several years, that the district's financial controls are "not operating", or are "inadequate" or "fail to reconcile" one pile of records with another.

Millions of dollars slosh around, beyond control. But nothing was stolen.

I've heard, and happen to believe, rumors that a stash of cash and uncashed personal checks from volunteers for the schools was found unrecorded, unsecured, and apparently unused for the intended purpose. Thousands of dollars lying around idle, unused for the children as intended. But nothing stolen.

I believe the documentation provided by the TEA to the Lancaster administration in February -- the paperwork that mysteriously went missing from February until May -- that indicates funds from restricted accounts were used for purposes unauthorized by statute or the voters. For instance capital (bond) restricted funds for buying staff cars that should have been paid for -- if purchased at all -- from ordinary operating funds. Half a million dollars, at least, illegally spent. But it wasn't stolen.

I believe that the district wastes money hiring outside staff to do jobs that employees are also tasked to accomplish. From dance consultants who duplicate the duties of phys-ed specialists to "campaign planners" (like Scott Milder, the Karl Rove for Texas State Legislative District 112) who subcontract to fulfill the obligations of the superintendent; it seems to me about twice as money is spent as the value of the results obtained. Perhaps somewhere between thousands and millions, call it hundreds of thousands, of dollars are so wasted. But not, I think, stolen.

I believe a very very senior LISD administrative official is terribly bad at math -- to the point where he (or she) cannot balance his own personal check book. I believe this person, charged with managing millions of dollars and making long range multi-year strategic plans, can not survive from month to month without requesting and drawing a payroll advance against anticpated salary. Sort of her (or his) own personal "bridge loan" to carry thru on those seemingly too-frequent occasions when there's just a lot of month left at the end of the money. It's just a rumor. But I've seen this official do arithmetic under several circumstances and I find the rumor entirely plausible. So, in this personal instance, the official repeatedly may need to borrow hundreds of dollars.

At least that money isn't being stolen.

I don't hear rumors at all about any theft. Waste, mismanagement, poor controls? Sure. Funds for Craft and Trade and remedial education (CompEd) diverted to grant-seeking efforts? Yep, I've heard that.

Improper use of federal Title-Whatever funds paid to TODAY Newspaper? Uhm, that's not a rumor-- that's the district's boast. Money diverted to utterly stupid vanity projects that don't help kids? I've not only heard that accusation. I've made it a time or two.

Or two hundred.

Money MISSING? Well, what do we mean by that? If we're talking about money not delivered to classrooms, yeah, I believe there is money missing.

Do we mean "money missing" as in money STOLEN? Gone to line the pockets of the people tasked to manage it? Like the money former LISD-CFO Eugene P Smith stole from his employer back in Washington DC? You know, stolen, embezzled, carried away, diverted into personal pockets for private gain-- STOLEN?

Surprisingly, I don't hear that. Not even an echo in my own shower. And I don't believe it.

A person can get fired for stealing. But you can be incompetent, untruthful, away-from-your-duties, and unproductive for years and still hang on to your six-figure-a year salary. And provided you're merely a terrible financial manager, you can look forward to a huge severance bonus when you do, eventually, get forced out of your job.

But stealing would be unbelievably stupid. Even for somebody who's hopelessly bad at math and desperately needs the money.

Which is what makes the denial so interesting. Accused of money mismanaged, wasted, lost, and over-borrowed, the district denies THEFT.

Oh.

Right then. Let's all just move on.

(I hear that the district has a problem with mail tampering. What do you hear?)

Friday, August 15, 2008

Marching Bands

I'm hearing rumblings that the Lancaster "back to school" parade may be as much a protest march as a celebration.

Apparently parents who paid to buy shiny uniforms for their high school students to parade in, haven't gotten either those uniforms, or a consistant story regarding what happened to the uniforms -- or the money.

The kids -- young ladies, I gather, the majorettes -- will be marching, if they can be persuaded, in black gym shorts and white t-shirts.

Sort of reminds me of a parable ...

The Music Man.

Anybody in Lancaster who missed the Cedar Valley College production of "The Music Man" this past summer missed not only a great show, but a vital education in how a local school district works.

But there are now two movie productions of the play, either of which offers a 2nd chance to catch up. Readers who have the time are advised to skip reading this post and go learn directly from the source.For the rest of you, let me recap the high points.

The school board in River City, Iowa is bitterly contentious. Then a fast talking good looking stranger comes to town. He makes sweeping promises. He charms parents and community members to buy into a dream. And he distracts the school board from both their duties and their differences. The board now accomplishes nothing except literally singing together in sweet harmony. Meanwhile the stranger extracts hard cash from the community for physical stuff -- musical instruments and elaborate uniforms. But people aren't buying the stuff -- they're buying the dream. They've believed that the stranger, the Music Man, will match their cash investment with his own investment of time, sweat, training and talent. They believe the Music Man can and will teach their children disciipline, cooperation, pride, and, of course, music.

Ah, but the Music Man is a fraud. He can't tell one note from another. He blows into town, collects cash, and leaves. The town is left with lots of shiny brass horns and, if any "band" at all, only an angry band of disappointed parents. (Typically, The Music Man also seduces and abandons -- saddens and wisens -- a girl or two in the process.) There's never been a trained and happy band of child musicians. The Music Man not only never teaches a single lesson himself; he alienates or distracts the actual music teachers -- old maid piano teachers, mostly -- making the music situation worse for every town he has ever worked.

Until, in River City, one courageous librarian stands up to the fraud. She by-passes the negligent school board; does her own independent research, and in the end forces the Music Man to stand and deliver on the promises made.Because this is a show rather than real life -- he does.

Alls Well that Ends Well.

There are more priceless lessons in the parable than I care to explore right now. Let me get away with three:

First, beware of a school board that sings together in sweet harmony. Harmony means they're not sufficiently independent, or skeptical. They are somehow under an influence that prizes the sound over the substance.

Second, dealing with a fraud doesn't depend on elected officials, anyway. And it doesn't take a huge committee. One person, patiently doing some basic research, can quickly learn all she (or he) and the entire community really needs to know. Provided the community cares to listen ...

Third, a dream can never be sealed to a contract. Buying tangible stuff, sure: sign on the dotted line, empty your pockets, and collect the delivery off the Wells Fargo Wagon. But beware when promised a dream. Beware a promise of a vision-statement, a mission, a strategy / process / character-development / community-improvement intangible. Beware the boys' band. Beware, especially, when you are promised a dream "for your children" . (Did you bother to ask your children about their own dreams?) Promised visions may live only in your incomplete memory of beautifully slick, fast, talk.

Marcellus Washington has settled in Lancaster and apparently intends to stay. But when Cambridge CEO Scott Milder arrives in town, we get to meet Professor Harold Hill himself. And the school board found sufficient harmony to sign on the line for the promise of better days to come. For the children.

Marion Librarian really has her work cut out for her this month.

Sunday, August 10, 2008


I recently received an extraordinarily hostile email from a local elected official regarding a comparison of the "sit down" protests of Rosa Parks to my own mule headed stubborness. It appears that in some quarters the pursuit of educational quality at reasonable expense is considered a cloak for pure blind racism.

Well, I do confess to "blind", anyhow. I used the expression "good ol' boys" in a previous post. Please accept my apologies for use of the racist bigoted code word "boy". I will refrain ever after.

The NETWORK of cronies involved any multi-million dollar project in Texas is ALWAYS a matter of public interest. Whether it's the Trans Texas Corridor, T. Boone Picken's wind farms, or the Rio Grande fence, the ostensible purposes of the road, the power line, or the border control project rarely determine the outcome. The question of which politician can help which banker, architect, construction company, and lawyer is generally at least as interesting as the project itself.

In Lancaster the players have recently changed. Joe Tillotson has retired after years of holding the mayor's office. And Gallagher construction, along with the brothers and former legislator's Fred and Roy Orr, have bowed out in the middle of the project for the new public safety building. Based on the rumors I'm getting third and fourth hand, it appears some city officials were unhappy about the costs being charged for exotic materials ... perhaps, (and I stress that I'm guessing) it might have been something as reported by Joey Daubin

But to return to Lancaster, the players have changed. So let's review the new program and get familiar with the new players. Not that any of these folks are crooks, cronies, henchmen to one another, or have ANYTHING other than the education of children and the absolute best use of public money at heart. But just so we know who they are:

First, the new mayor, Marcus Knight. Mr Knight, formerly of Fort Worth, is a relatively new face on the Lancaster scene. He's come to us extremely well connected, though.




Twenty-two years ago, his father, Richard Knight Jr., was appointed Dallas' first black city manager. His mother, Mavis Knight, is on the state Board of Education.





Mavis Knight is, according to her bio for the State Board, is


married to Richard Knight, Jr., and they have three adult sons and eight grandchildren.


So we look at the current activities of Richard Knight to find out more. Well, the senior Mr Knight is, like his wife, active in supporting local schools. "Local", for the Knight family, has been focused on Fort Worth.


As vice president and COO Marcus E. Knight, formerly a marketing manager for Toyota Motor Sales in the New York Region, oversees the day-to-day operations for Knight Waste Services. Working with the Fort Worth Metropolitan Black Chamber of Commerce and the Fort Worth Independent School
District, the Knight family is sponsoring an Adopt-A-School program for the students at Dunbar Middle School on the city’s south side. The company started mentoring during the 2008 spring semester and will host a Career Day presentation in May at the school.



Somewhat odd to see Mr MARCUS Knight so active in the Fort Worth ISDs in spring 08 while his own Lancaster mayor's race was being contested ... but there you are.

Now, it's perhaps not entirely altruistic of Mr RICHARD Knight to be earning goodwill and good publicity from schools. In addition to his solid-waste and recycling business, Richard Knight is "chairman and managing partner of a construction firm. Pegasus Texas Holdings LLC is a construction management firm with offices in Fort Worth and Dallas.

Oddly, the PRESIDENT of Pegasus has almost no visible construction background at all. The President of Pegasus is an good old -- well, he's a white guy so maybe it wouldn't be offensive to use the word, but I did promise -- a good ol' fella from Lancaster ISD, Dr Larry Groppel. Ex-Superintendent. According to the bio on the Pegasus site:
Dr. Groppel brings an extensive resume and impressive background to the firm in both education management and construction of educational facilities. He offers twenty-five years of construction related experience.


Which is to say, he campaigned for his districts' school bonds.

Nothing illegal about that, by the way. It's called "informing the public". (We don't use the word "electioneering." )

Dr Groppel is ALSO a well connected sort of guy. His work in the Dallas ISD brought him to federal level attention. Not the best sort, but federal attention even so. The "connect the dots" among Larry Groppel, Ruben Bohuchot, William Coleman, Frankie Wong and other "guys in ties" is nicely summarized by Peyton Wolcott. Luckily for us all, Dr Groppel was, well, let's use the word "cleared."

Somewhat oddly, Dr Groppel used to be a rather important figure on the masthead for school banking outfit Moak, Casey. He still shows up on the front page -- see top of this post -- but the links don't seem to go anywhere anymore.
But not to worry. Dr Groppel is NOT confined to the wage he earns from Pegasus Texas Holdings. No, Dr Groppel is now working with the Lancaster ISD's news planning team, Cambridge.
As it happens, Cambridge does not yet acknowledge that Dr Groppel, ex-Lancaster ISD superintendent and approver of the Dallas ISD technology plan, is among the consultant's planning associates. Any day now, I suppose.
We need now to take a deeper look at the role Cambridge Strategic Planning plays into the school construction racket. For that, we need to look at Scott Milder, "Marketing Professional". THAT, friends, is subject of another post.
Racket -- a business that obtains money through fraud or extortion; an illegal or dishonest practice -- a clamor or uproar.

Also known as the "good ol' boys" network.

The racket is back. The players may change, but the game remains the same.

Mark this down and see how reliable my "clamor" is, compared to the mouth-noise of some self-styled "leaders" in this area.

I predict Lancaster ISD hires a new architect --the SHW Group. When you care enough to spend the very most -- SHW are the go-to guys. Bye bye, Steve Hulsey and Corgan Schools.

I predict Lancaster ISD tosses Matt Boles of RBC Dain Rausch under the bus. They'll bring in new bond advisors from the firm Moak Casey. This, despite the flowery praise Larry Lewis always heaps upon Boles as a 'true friend of this district". Bye, Matt. It's been fun, no hard feelings, nothing personal, just the racket, you know.

I predict a "bond steering committee" will be appointed before Christmas, 2008. Strangely, the majority of bond committee membes will have been members of the "strategic planning committee" that is still to be formed. "Red" Whiddon and the "School Business Group" will NOT be facilitating. Bye bye, Red.

I predict Dr Larry Lewis will violate state law regarding similar committees, specifically, the Texas Education Code . I further predict attorney Cynthia Hill and conservator James Damm will find other priorities to worry about. Hey, team. it's only a law...

I predict the 07-08 acheivements of the Lancaster Middle School will be attributed to local hero Eugene Young but that the TEA-appointed intervention led by Bobby Parker -- old white guy from Waxahachie -- will be completely obscured. Sorry Bobby. Hey, Bobby, want a secret mission to the High School?

Speaking of old white guys, I predict no praise or publicity for perennial not-quite-entitled-to-the-title-Chief-Financial-Officer Ted Warren. Certainly he'll get no more credit for salvaging any of the LISD's finances in the coming year than he was offered in May 2007. Just as Cheryl Peoples was praised to the sky for her long hours during the construction of an 06-07 ledger to be audited - while rescue consultant Warren was never publically mentioned -- I predict this year's budget process will rely heavily on the man Lewis forced out of this district in 2005, without actually mentioning, let alone praising, the white guy's efforts.
And I predict this ommission even though Dr Lewis begged the board, TWICE, to re-hire Warren; a second bite at the apple from the full board after a quorum failed to approve Warren's hire , 2-2-1, in the previous month. Hi Ted, welcome home.

And still speaking of old white guys, I predict former trustee Russ Johnson soon will be in the back in spotlight. Not, I fear, enjoying his new role as local spokesman for Fiends of Texas Public Schools. For that, Russ has impeccable credentials, being one of the few trustees refusing to allow taxpayer funds to buy his meals at board social events, and refusing travel expense reimbursements for his training and other necessary trips. Unfortunately, with the collapse of new Trustee Cheryl Wright under the rudeness and mockery of Ed Kirkland, Russ is, I predict, a leading contender for apppointment to re-fill that seat until May elections. This allows Russ to exercise his self-proclaimed ignorance about the complexities of school finance law. It also affords him the on-going opportunity to lecture us all about the biggest problem in public schools: too much money "wasted" --as he puts it -- doing maintenance on infrastructure. So we'll soon see Russ and the FOTPS fiends and the Lewis-and-Kirkland song and dance team stumping for a new bond at civic clubs, church groups, and town meetings all over Lancaster. I'd welcome you back, Russ, but then, you never really went away, did you?

Monday, July 07, 2008

Eugene Smith was accused of embezzlement in October 2007. Smith pled guilty to embezzlement December 10th, 2007. He was sentenced to federal prison by a judge Rosemary M Collyer on May 8th, 2008. (US District court)

Why isn't he in custody? He drew six months of confinement -- he should have started his term by now, and should still be marking up the walls of a prison somewhere.

But he has not started to serve his time. He has certainly not come and gone -- been put in and been released. I'm looking at data from the federal "Bureau of Prisons" that indicates he's never been processed into the system.

Now, sometimes, a convicted felon makes a deal with the courts and prosecuters to give evidence against a "bigger fish". By turning over what he knows about other criminal activities, a felon may stay out of prison, or get a reduced sentence, or even enter a "witness protection program" and start a new life under a new name.

It happens.

But what could Eugene P Smith possibly know about other criminals who might be of interest to federal investigators?

Sunday, July 06, 2008

A couple quirky things.

Why are the the LISD board's July 2008 meeting agendas posted in the 2008-2009 directory structure? Shouldn't the business of 2007-08 (fiscal year ending 31 August) be wrapped up before we start the meetings for 2008-09?

Odd to have a Wednesday meeting (the 9th) rather than a Monday. Another change by the new board members.

Strange to see the agenda proposing to "approve administrative appointments." I might have supposed the budget still needed review before the number -- and pay rates -- for administrative appointments could be discussed.

Oddest of all -- Didn't President Morris propose to introduce conservator James Damm to the board at that meeting? Are these introductions so intimate they must occur in the executive session?

Tuesday, July 01, 2008

Damm, Jim is back.