The California Senate Office of Oversight and Outcomes released a scathing report accusing many of the state’s largest school districts of diverting millions of dollars of federal and state aid for the school lunch program to other areas. NBC Los Angeles has the details:
Hopefully this will lead to a greater examination of school finances, since most of these abuses were uncovered by whistleblowers and not government overseers. However, I would like to focus on a different aspect – what this scandal reveals about school district communications.
The oversight report states:
As it continued to misappropriate millions of dollars from its cafeteria fund, Los Angeles Unified depleted a longstanding surplus and began running ever-increasing deficits in its food service program.
In January, 2009 – a few months before the state would learn the extent of Los Angeles Unified’s diversions from its cafeteria account – the district held a press conference to appeal for increased state meal subsidies. The district’s news release was headlined: “Cafeteria fund cash flow may leave neediest LAUSD students hungry.”
I tracked down the press release from that news conference, and it’s a doozy:
Los Angeles— Los Angeles Unified School District (LAUSD) Superintendent Ramon Cortines joined by State Superintendent of Public Instruction Jack O’Connell, Assembly Member Tom Torlakson, and other LAUSD officials announced today the District may run out of the money needed to feed hungry children. For many LAUSD students, the free and reduced priced breakfasts and lunches eaten at school are their only nutritious meals of the day.
“School children cannot learn when they are hungry,” said Superintendent Cortines. “We have several actions currently underway to drive costs down but, at some point, we could face impacts to the program itself. We may eventually be forced to replace fresh fruits and vegetables with less expensive frozen ones and offer fewer whole grain products although they are healthier than the alternative.”
District officials are worried that escalating costs, and the growing issues related to the economy, could have a serious impact on the meal program if comprehensive actions are not taken soon. Of the meals served daily, approximately 78 percent of students in the LAUSD qualify for free and reduced-priced meals. Meanwhile, the number of students who are eligible for the subsidized meals is growing as parents lose jobs or have their hours cut at work, and more families become homeless. While there is a decline in student enrollment, the District has served more than 10 million additional meals in the last two years.
Because of a shortage of state funds used to supplement the federal children’s nutrition program, tens of thousands of children, primarily the youngest in the District could have modified meal programs as early as next month.
“During these uncertain economic times, families have taken to tightening their finances, and so we’ve seen a dramatic spike in the number of children who are receiving subsidized school meals. In fact, we are perilously close to running out of money to provide these meals, but we can’t let this happen” said O’Connell. “Our responsibility is to ensure that students who need these meals get these meals, because hungry children don’t learn. Assembly Member Tom Torlakson’s legislation is the fix we need right now to continue serving these meals to our low-income students for the remainder of the school year.”
Torlakson’s bill (AB95) would specify that, if the Superintendent of Public Instruction determines that the appropriation set forth in the Budget Act of 2008–09 is insufficient to fully fund all free and reduced price meal reimbursement claims, the State Department of Education shall notify the Legislature of the statutory funding amount necessary to reimburse school districts at the prescribed rate. The bill would appropriate $19.5 million to reimburse claims pursuant to those provisions. This bill would declare that it is to take effect immediately.
“Some of our country’s greatest visionaries saw the school lunch program as a way to help lift American families out of economic despair during the depression era. They knew this early investment in our children would have long-term impacts on the health and education of America’s next work force,” said Torlakson. “Today, as more and more families face economic uncertainty and are forced to use this critical safety-net program, we can’t stand by and allow the funding to run dry.”
The District has been utilizing the fund balance for the last two fiscal years due to significant increases in costs without a corresponding increase in revenue. This is reducing the amount of fund balance available for cash flow, and now results in the need to borrow short-term General Funds during the year.
“This would dramatically exacerbate the issue,” said Cortines. “If this were to occur, a portion of the General Fund loan could turn into a permanent transfer of funds to the Cafeteria Fund, or we could face significant service reductions in the meal program to prevent long term General Fund support. With the mid-year cuts needed now, and the forthcoming cuts next year, this supply isn’t an option.”
Given the possible shortfall in state revenue, Superintendent Cortines has directed a comprehensive legislative and media initiative to ensure state decision makers and the public understand the consequences of a compromised meal program would have on our students ability to learn.
“Unlike traditional department budgets, the Cafeteria Fund exists much like a business in that expenses are incurred to create products, and then reimbursement is received later from meals served. The loss of reimbursement from the State upsets that balance and leaves us with increasingly unaffordable costs. It is a recipe for failure,” explained LAUSD Business Manager Michael Eugene.
Fortunately, Torlakson’s bill went nowhere, although Torlakson himself was elected State Superintendent of Public Instruction in 2010. Eugene, strangely enough, was lauded in the oversight report for warning LAUSD about illegal misappropriations from the cafeteria fund in 2003. Apparently he was an internal watchdog and an external lapdog.
How many times have we seen press conferences like that one, with the guilt-inducing images of hungry children, homelessness and job losses? If only we weren’t so stingy and small-minded, and would cough up another $19.5 million to… what? Well, as it turned out, to buy lawn sprinklers for the district’s television station. The starving kids were a prop. The district superintendent and business manager were scamming us, and they got the the state schools superintendent and a prominent legislator to back them up.
The oversight committee members are convinced the problems they found are only a small sample of a systemic failure. But at least the lawns look nice.