Interim Joint Committee on Appropriations and Revenue

 

Budget Review Subcommittee on Primary and Secondary Education

 

Minutes of the<MeetNo1> 3rd Meeting

of the 2012 Interim

 

<MeetMDY1> October 25, 2012

 

Call to Order and Roll Call

The<MeetNo2> 3rd meeting of the Budget Review Subcommittee on Primary and Secondary Education of the Interim Joint Committee on Appropriations and Revenue was held on<Day> Thursday,<MeetMDY2> October 25, 2012, at<MeetTime> 10:00 AM, in<Room> Room 149 of the Capitol Annex. Senator Jared Carpenter, Chair, called the meeting to order, and the secretary called the roll.

 

Present were:

 

Members:<Members> Senator Jared Carpenter, Co-Chair; Representative Derrick Graham, Co-Chair; Representatives John "Bam" Carney, Will Coursey, Ted Edmonds, Dennis Horlander, Carl Rollins II, and Steven Rudy.

 

Guests: Honorable Adam Edelen, Auditor of Public Accounts; Mr. Hiren Desai,

Associate Commissioner, Kentucky Department of Education; Ms. Kay Kennedy, Director, Division of District Support, Kentucky Department of Education; Col John W. Smith (R), Director, Kentucky Youth ChalleNGe.

LRC Staff: Tom Willis, Perry Papka, Kelly Dudley, and Amie Elam.

 

Financial Audits of Local School Districts

The Honorable Adam Edelen, Auditor of Public Accounts, gave a presentation on the process of financial audits in local school districts. He focused on the importance of using tax dollars wisely and ethically to provide students in the Commonwealth with a world class education.

 

In response to a question from Chairman Carpenter, Mr. Edelen said that the Auditorís Office has a strong focus on issues that have a broad impact. He made clear that the office works hard to air out complaints and only investigate the most egregious examples of mismanagement and corruption based on legitimate complaints.

 

In response to a question from Representative Carney, Mr. Edelen said there is no built-in whistleblower protection. Mr. Edelen stated that he would review the issue with his general counsel and respond to the committee in writing when he has more information.

 

In response to a question from Representative DeCesare, Mr. Edelen stated the Auditorís Office does not have the force of law behind its recommendations. The office has the ability to make referrals to the IRS and law enforcement agencies based on its findings.

 

In response to a question from Representative Adams, Mr. Edelen said that the Dayton Independent School District in northern Kentucky is under investigation. The most common theme in his investigations stems from superintendents not having the appropriate level of oversight from their school boards. Mr. Edelen said he does not have adequate resources to drill down as much as his office would like, but he stated he will not be pleading for more funds.

 

In response to a question from Representative Graham, Mr. Edelen stated that new legislation is not needed regarding oversight of school boards. He said that more attention needs to be paid to how tax dollars are being spent.

 

In response to a question from Chairman Carpenter, Mr. Edelen said that near the end of 2013 a collection of observations will be produced by the Auditorís Office along with recommendations for training.

 

Representative Carney mentioned the importance of highlighting districts that are doing the right thing. Mr. Edelen added that there are more examples of commitment within school districts to do the right thing than examples of abuse.

 

In response to a question from Representative Simpson, Mr. Edelen said that there are eight educational co-ops. He said that most savings are used to fill holes from necessary budget cuts.

 

Financial Condition of Local School Districts

Hiren Desai and Kay Kennedy, Kentucky Department of Education (KDE), gave a presentation on the financial condition of local school districts. This included a discussion of FY 2011-2012 end of year fund balances, current tax rates, number of employees in the district, average daily attendance, as well as general comments related to districts with serious financial difficulties.

 

In response to a question from Representative DeCesare, Mr. Desai said that having new superintendents is a double edged sword. The new superintendents provide a fresh set of eyes with new ideas, yet they struggle with the complexity of managing districts. Mr. Desai added that new superintendents are often more concerned with the instructional aspects of the job, and seasoned superintendents often have a stronger business background.

 

In response to a question from a Representative Graham, Ms. Kennedy stated there are statutes governing how a merger occurs. KDE acts as a facilitator between districts using the existing statutes.

 

Chairman Carpenter said it is important to fine tune elective training to the issues that are affecting school districts.

 

In response to a question from Representative Adams, Ms. Kennedy said that professional staff data refers to certified staff including teachers, superintendents, and principals. Classified staff is non-certified personnel including clerks, secretaries, custodians, food service, and bus drivers. Ms. Kennedy indicated she would provide additional information to subcommittee members.

 

Status Report on the Appalachian ChalleNGe Academy

††††††††††† Colonel John W. Smith gave a status report on the Appalachian ChalleNGe Academy. The Appalachian ChallNGe Academy is a residential program working with dropouts and is in its first year of operation.

 

††††††††††† In response to a question from Representative Graham, Colonel Smith said ChalleNGe does not have the authority to issue diplomas. He added that the goal, regardless of where the diploma is issued, is to get the student off the dropout list.

 

There being no further business before the committee, the meeting was adjourned at 12:01 PM.