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CAFR is now in the 'NONE OF YOUR F%!#@_G BUSINESS' category for Rahm Emanuel's Board of Education... CPS officials 'erasing history' as part of Internet (and paper) coverup of the history and business of America's third-largest school system

Chicago Public Schools officials have been slowly and meticulously erasing the public record of the history of important CPS actions since Rahm Emanuel became Mayor of Chicago in May 2011. Among the documents that have been removed from the CPS website are the "Action" agendas from the Board of Education meetings prior to 2003, staff racial ethnic surveys, and hundreds of press releases and notifications of press conferences that were held prior to 2011. After May 2011, CPS officials instituted a blackout on the give-and-take of press conferences with reporters between CPS officials and the city's media. Instead, the vastly expanded CPS "Communications" office has been issuing press statements and refusing to answer most follow up questions from the city's remaining education beat reporters.

Since the Chicago Board of Education appointed Barbara Byrd-Bennett (above speaking to the Board during the December 19, 2012 Board meeting) as its second "Chief Executive Officer" in as many years since Rahm Emanuel became mayor, CPS officials have escalated the purging of public documents from the Board's Internet records. Violating a tradition that dates back decades, Byrd Bennett in January 2013 ordered CPS not to post or publish the CAFR, which constitutes the only reliable version of CPS finances available to the public. Critics suspect that the order to keep the FY 2012 CAFR from the public is based on the fact that CPS officials have been melodramatically escalating the claims of a massive "deficit" during recent years. When the CAFR is published, the lie of the previous year's "deficit" claims is exposed. The FY 2012 CAFR, which cover the audit of the school system's finances for the fiscal year between July 1, 2011 and June 30, 2012, will be the first to scrutinize the finances of the school system whose Board and officials were appointed by Mayor Rahm Emanuel. Substance photo by George N. Schmidt. Additionally, the members of the Chicago Board of Education have continued to practice of sealing the minutes of their executive sessions, which take place at each of the monthly meetings of the school board. This becomes more important during an era when the mayor and his aides repeatedly claim that they are opening up a new era of what they call "transparency" in Chicago political affairs.

A major example is the decision by CPS to hire almost all out-of-town executives since the Emanuel era began in May 2011. While a great deal of attention was paid to the highly publicized announcement (in April 2011) by then Mayor-elect Emanuel that he was bringing in Jean-Claude Brizard to from Rochester New York to head the massive Chicago school system, no public attention (except here at Substance) has been paid to the regular appointment of officials from Cleveland, Cincinnati, Kansas City, Detroit, Memphis and elsewhere to top Chicago public education executive positions.

Since there has been little or no discussion of major personnel decisions -- including the hiring of more than 40 executives at salaries ranging from $100,000 to $250,000 per year -- on the public record since the Emanuel administration took over the nation's third largest school system in May and June 2011, the public is kept in the dark about the criteria used by CPS to vet key personnel. There has also been no public discussion of how CPS establishes both job titles and salaries for the system's top officials. Most since May 2011 have been hired from outside Chicago, adding an additional expense to the hirings. Dozens of officials hired since Emanuel became mayor have been awarded "relocation expenses" on top of their often unprecedented salaries as they arrive in Chicago from out of town. Brizard's $35,000 relocation expenses when he moved to Chicago from Rochester in 2011 was the beginning of a policy which had never existed before.

Additionally, the seven members of the Chicago Board of Education have routinely approved budget decisions based on figures which have later proven to be false and deliberately misleading. The current example of that is the fact that CPS officials have been publicly utilizing a talking point that claims CPS if facing a "debt" of $1 billion next school year, when in fact the actual budget figures (based on projected expenses and projected revenues) show that for the past 20 years CPS has deliberately created a fictional "deficit."

This month, January 2013, for the first time in history CPS officials are refusing to public the annual audited financial report (the CAFR, of Comprehensive Annual Financial Report) in January. Traditionally, the CAFR is presented to the members of the Board in December of each year and released to the public in January. The CAFR, which shows the audit of the fiscal year that ended the previous June 30, has always been the most reliable document revealing the actual state of CPS finances (and debunking earlier claims of "deficits" ranging as high as $1 billion (the final year of Ron Huberman's time as CEO). The CAFR for Fiscal 2012 (the fiscal year that began July 1, 2011 and ended June 30, 2012) has not been reported to the public this month for the first time in history.

instead of clear information and press conference where CPS officials have to answer questions in an open forum, CPS has created a culture of cynical secrecy, with carefully leaked media talking points given to selected reporters, while the public in general is denied access to basic information about how CPS policies are developed. With the latest change in the ability of the public to participate in the monthly meetings of the Chicago Board of Education, the denial of basic public access to the information and meetings of the third largest school system in the USA has become more severe as 2013 begins.



Comments:

January 8, 2013 at 4:36 PM

By: Rod Estvan

Many good observations

I think that George Schmidt's article on the failure of CPS to release its annual Comprehensive Annual Financial Report up to now was very interesting. I have to assume that unless the CAFR appears soon the Bond rating agencies will get even more alarmed than they are already regarding the overall fiscal situation of CPS.

I would speculate that one reason we are seeing increasing numbers of administrators brought into CPS from outside of Chicago is that they are intended to be transient not career employees. These new hires may not expect to be at CPS for very long. This makes a lot of sense if we begin to think that the central office as we have known it is disappearing.

The costs for central administration will be shifted where ever possible to contract employees and project based hires. This doesn't mean necessarily that the actual costs will decline dramatically, but the costs are likely to become more obscure as part of larger service contracts.

Rod Estvan

January 8, 2013 at 5:14 PM

By: George N. Schmidt

CAFR lie no accident -- Byrd-Bennett, Rahm sabotaging education in third largest city in USA

While I hadn't thought about Rod Estvan's take on the refusal of CPS officials to release the CAFR as required, it's deeply disturbing. A couple of people said "What?" and I have just told them to look up the CAFR at cps.edu or call and make a FOIA request.

But the sabotage of the city's public schools by Rahm Emanuel's appointed Board and appointed administrators doesn't stop by removing key history from the official record and covering up the facts from public access to the annual audit.

Every time Byrd Bennett or someone echoing Rahm talks about "crisis" there should be screaming from Howard St. to 135th St, "Liar! Liar!" But this year's version of the Rahm script is much more dangerous than last year's, when Rahm's millions and minions were hiring the "rent a protesters" and "rent a preachers" to try and lie to the public. This year it's straight out of the playbooks developed by dictators like Nicolai Ceausescu (Romania, before 1989) and elsewhere. Erase the facts and replace them with careflly staged spectacles and regularly repeated lies.

Within a couple of days, we will have a complete story at Substance of the "churning" of top administrators at CPS since Arne Duncan went to Washington four years ago. Arne Duncan, followed by Ron Huberman, followed by Terry Mazany, followed by Jean-Claude Brizard, followed by Barbara Byrd-Bennett, followed by ????

And that's just the four year list from the job of "Chief Executive Officer." When you go through the "Chief Education Officer", "Chief of Staff," and all the other "Chiefs..." it's the same expensive patterns. If Rahm learned corporate welfare while serving as Chief of Staff in the White House during the bank bailout, he is today pioneering hack bureaucrat welfare on the CPS payroll. In most other towns, this would be a scandal. But here, it's not even "news" (except here). The churning is mayoral policy.

As I'm reporting, most of the top hirelings under both Brizard and now under Byrd-Bennett have been out of towners who need a GPS (probably paid for by CPS) to find their way from Bogan to Bowen, while all of them are receiving "relocation expenses" at a time when Byrd-Bennett keeps prattling about that phony "billion dollar deficit" and using that lie to justify what she is calling her "underutilization crisis".

The damage is already severe, and if Rod's theory proves true (and CPS outsources management further -- both by sourcing it to out-of-towners or hiring contractors to assassinate the public schools of Chicago), there will have to be more and more corrections made every time someone at the top lies or simply screws up because of ignorance.

I am assuming that Byrd-Bennett herself is lying. It's part of her history going back to Cleveland, long before she became a Broad Foundation factotum and then part of the crew of the Death Star that was aimed at Detroit before she was plucked by Rahm for here. The others may be more pathetic, but they are equally expensive mercenaries that Chicago taxpayers should reject.

Last year, Rahm bragged that he had "reduced administration" by "$400 million" which was just one of many lies (I heard him repeat it at a number of media events, usually those corporation thingies he hangs out to show off his prowess). But there was a massive departure from administration -- because Rahm's regime (then under Jean-Claude Brizard) sabotaged middle management.

The formula was simple: The ability to cash in accumulated sick days was ripped away from the senior administrators and principals, some of whom had worked without using sick days for decades because it was a cash benefit. When CPS announced mindlessly that it was "losing money" by allowing the accumulation of sick days (dutifully prattled back in the echo chamber of the Sun-Times) and then announced that it would not allow the cash out for "non union employees" the die was cast. Hundreds of principals and middle-level people, many of whom were not replaceable, were gone.

The only word for what Rahm Emanuel is trying to do to CPS is sabotage, as a prelude to privatization. Anyone who wants to see the "public school system" that Rahm's team has in mind can drive around Detroit, as our friends have, and see the ruins of a public school system. That's the main qualification Barbara Byrd-Bennett brought to Chicago and the danger her hypocritical prattlings, reported as "news", bring to the nation's third largest school system.

January 10, 2013 at 5:31 AM

By: Valerie F.Leonard

The CAFR Probably is Not Done Yet

George, I have included a link to the Official Statement (O.S.) from the last CPS bond issue (December13, 2012). (The bond issue was meant to refinance outstanding bonds at a lower interest rate.) The O.S. has a blank page indicating that the audited financials for FY2011 should be inserted in that space. Apparently, the CAFR was not completed as of the date of the bond issue. The O.S. indicates that the audited statements were not done at the time of the bond issue. CPS has 210 days after the close of the fiscal year to get the statements done.

You will see summary financial information from FY2012 which has been estimated. Further in the document, there is only a comparison for FY11 with FY10. You will also see the approved FY2013 budget.

While CPS has financial challenges, I agree with you that the situation is not as dire as they make it out to be. The O.S. makes mention of the fact that the FY 2012 revenues are understated by $194 million due to the fact that $194 million was received between the time the 2012 budget was published and the time FY2012 ended July 31, 2012. While the financial statements in the O.S. don't show the $194 million in 2012, the FY 2013 budget does include this amount in the revenue projection. The O.S indicates that an adjustment will be made when the audited statements are done. As a result, when the CAFR does come out, the FY2012 revenues and fund balance could be $194 million greater than shown in the official statement. CPS had an estimated operating deficit of$114.5 million at the end of FY2012. When you add the $194 million back to the revenues, the deficit should disappear, and you should expect to see an operating surplus of around $79.5 million for FY2012 after the audit is completed. This number could vary, as other adjustments may be necessary during the audit. It is not clear whether the FY 2013 budget will be revised.

Check out the O. S. at http://www.cps.edu/About_CPS/Financial_information/Documents/OS_2012B.pdf Also, we know these statements are accurate to the best of their ability, as they don't want to be sued by bondholders.

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