In Utah there is no shortage of coverage and comment about school funding levels. Newspapers editorialize, activists criticize and parents wonder whether resources will ever match the need. Education funding is an issue in every election. Yet amid all this talk of funding, there is surprisingly little discussion of how we as a state manage the money that is allocated to education: Are we doing all we can with what we’ve got?
Since Utah notoriously has the lowest per-pupil expenditures in the nation, one might assume that proper management of those precious education dollars would be top priority. But such has not been the case.
After being elected to the Utah State Board of Education two years ago, my first request to staff was to see a copy of the board’s budget. My professional background is in financial management, so I thought this was a logical request. Instead, I was astonished to receive a question: “Why would you need that?” Evidently, prior to that time, the board was content to “trust” all was well with the taxpayers’ education dollars.
With the support of a majority of that board we secured access to “our” budget and began a review of it and the Utah State Office of Education budget. What we found was far from comforting. Our auditors have revealed millions of dollars of accounting misstatements and inaccurate bookkeeping for federal grants. Some will recall a $25 million error in the FY 2012 budget; the risk for another such error from our office has yet to be eliminated. And that is just for starters.
We have discovered the Utah State Office of Education does not use a standard-practice accounting system for day-to-day office operations dealing with the $4.3 billion public education budget. The present system lacks the double-entry procedures that have been the foundation of accounting since the Italian Renaissance. Other critical controls are also lacking. These deficiencies not only increase the risk of human error, but they also increase the risk for fraud, waste and abuse.
We also learned that, prior to that time, the state board had never actually approved a board or agency budget. How can we possibly assure parents, students and taxpayers their dollars are well-managed?
Lack of budget discipline led to misuse of an “unclassified miscellaneous” line item that fed into a then-called “Superintendent’s Discretionary Fund” of anywhere from $1 to 3 million. This was spent outside the review of any elected officials. After discovery, the board passed a new administrative rule in 2014, but such rules are of little value if the accounting system itself is unreliable. The full financial review and transition to modern enterprise systems will take years; we may discover more problems along the way.
The good news is that the Utah State Board of Education is actively pursuing changes. We know that dependable financial data is indispensable and will only come after extensive reform, which can only be achieved after a full, transparent review.
As a financial professional I expect accurate and reliable budgets, as do my board colleagues. For the first time since joining the state board I feel optimistic. Because of new board members brought in by the last two elections, a new state superintendent and changes in executive staff, I am confident we can successfully implement these critical reforms.
Despite disagreements over public education funding in Utah, I believe we can all agree that Utah cannot afford anything less than excellence in managing the dollars dedicated to the education of our children.
Jennifer A. Johnson has been a member of the Utah State Board of Education since 2013 and is chairwoman of its Finance Committee. Her view is not necessarily the opinion of the Utah State Board of Education.