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Grand Forks schools sent questionable data to state

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news Grand Forks, 58203
Grand Forks North Dakota 375 2nd Ave. N. 58203

Per-student spending by the Grand Forks School District has spiked compared to other districts, but school officials are confused by some of the reported increases.

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The misclassification behind the increase of $1,549 over two years, or 16.4 percent, raises more questions than answers, said Business Manager Ed Gerhardt.

Average per-student spending in Grand Forks was $10,970 in 2012-2013, while the state’s other largest districts — Fargo, West Fargo and Bismarck — reported notably less.

Gerhardt said total spending reported to the North Dakota Department of Public Instruction report was realistic and reflects increased operation costs. But hikes in certain categories — such as a 77 percent increase in general administrative salaries over one year — were “not logical.”

Attention to the increase first surfaced during the Herald’s recent report comparing North Dakota school districts by spending, graduation rates and other factors.

Legislators expect this information to be accurate, especially as they track overall salary and compensation increases to make informed funding decisions, said Sen. Tim Flakoll, R-Fargo. He’s the current chairman of the Legislature’s interim Education Funding Committee.

“When you look at 8,000 teachers (statewide), a small amount of error really can add up to be a significant amount of taxpayer funds,” he said.

‘Defies logic’

The cost to educate students is based on teacher and administrative salaries, capital expenses such as construction and operating costs.

Of all the spending categories, teacher and administrative salaries for Grand Forks raised the most curiosity. They’re also the biggest drivers in per-student spending.

The most outstanding example was an 83 percent increase in general administrative salaries — employees who work in the district’s central office — over the two year period.

There’s no way salaries could increase that much unless someone reclassified expenditures into different categories, said Gerhardt.

“It defies logic,” he said.

In the report, teacher salaries didn’t increase by more than 1 percent over the two year period, though that conflicts with raises the teacher’s union has negotiated each biennium. Districts in Fargo, Bismarck and West Fargo increased teacher between 9 and 16 percent over the same two year period.

“It just doesn’t make any sense,” Gerhardt said.

His recalculations didn’t come up with any conclusions, and he couldn’t consult with former business manager Vicky Schwartz, whom he replaced a few months ago. Michelle Emineth, a longtime accounting supervisor, and Superintendent Larry Nybladh were both unavailable for comment.

Enrollment growth across districts, reflected by actual attendance throughout the year, ranged from the lowest increase — 1 percent in Grand Forks — to 12 percent in West Fargo, according to Gerhardt’s re-calculation of the figures. This may not be entirely off mark as Grand Forks saw its first major enrollment increase in 2011-2012.

Possible reasons

The reasons behind inaccuracies can include a change in software that could spur reclassification of certain expenses — such as what’s considered “extracurricular” or not — or broad interpretation of categories, said Gerhardt.

The latter might apply to Grand Forks. The district’s “other expenses” category was consistently the lowest among districts and should only include the cost of tuition and adult education. In 2011-2012, the district reported $730,153 while Fargo reported nearly $10 million, according to the state report. Fargo Superintendent Jeff Schatz was not able to comment on this by press time.

“What is ‘other’? You have a wide variation,” said Gerhardt. “There is guidance, but it can be interpreted differently.”

There are other reasons behind noticeable spending shifts, too. For instance, in Fargo the average cost per student reduced by $65 over two years.

Schatz said in an earlier interview that one of those years had an anomaly — the district had a one-time, larger than average payment in 2011-2012 for the Bluestem Center for the Arts in Moorhead, which is managed by the district. That year, the district reported $4.2 million in capital expenses.

This cost likely drove down the cost per student the following year, he said. The state report shows the district spent $291 less per student in 2012-2013.  

Overall, his district has been consistent with spending for many years, he said.

Trustworthy data

Districts report detailed information on salaries and other expenses to the state department each year as part of legislation passed in 2001.

Jerry Coleman, state director of school finance, said the accounting manual districts use for the report is “pretty straightforward,” and while he expects some misclassification, it should be fairly minimal.

After recalculating some of the figures for the Grand Forks district, he said he was surprised and expected more from the district.

But he also noted that data is all self-reported and the state department’s staff is too small to double-check information. And while districts get audited, it’s only required every two years, he said.

Still, “we don’t look into it in as much detail as we should,” he said. “We should design some tests to flag some of that stuff.”

Flakoll said the thrust behind requiring districts to report in the first place was to provide trustworthy information. Mistakes are understandable but should still have consequences, he said.

“I think we will fully see some legislation that puts more sanctions on those that don’t comply with the law,” he said.

As a legislator, his credibility is on the line, too, when passing this information on to other lawmakers, he said.

“We need to feel the highest level of certainty that the information we’re passing on is credible and correct,” he said. “When people are no longer credible or correct, their voice doesn’t matter as much.”

On the Web: For full finance reports for each district, visit the DPI’s website at bit.ly/1oieWSW.

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