How Local Control of Public Schools became Local Chaos

August 8, 2008 - Letter to Speaker Craddick and response from Speaker Craddick

Understanding financial expenditures in our public school districts should be as easy as ABC.

Here's why we need a primer:

PEIMS for Dick and Jane

[A Primer for Parents and Taxpayers]

COPYRIGHT © 2008 ALL RIGHTS RESERVED NANCY KESSLING and DIANNA PHARR

PERMISSION GRANTED TO REPRINT WITH COPYRIGHT INTACT

What is PEIMS?

The Public Education Information Management System (PEIMS) was developed by the Texas Education Agency (circa 1984) to provide a comprehensive statewide system of financial accounting for public schools and universities. The original publication, Bulletin 679, morphed into the Financial Accountability System Resource Guide (FASRG - pronounced FAZ-RAG) and can be accessed through the TEA website:  www.tea.tx.state.us/gov.

What is PEIMS purpose?

The legislation was written to require uniform and consistent use of coding.  Taxpayers, legislators and Educrats should have the ability to extract meaningful data from local data bases.  To achieve this objective, local administrators would use standardized coding elements on the “chain” of codes defined as the “account code structure”.

What are PEIMS “coding elements”?

The financial accounting process requires that each financial accounting transaction be identified using a series of mandated codes:  fund-function-expenditure/receipt-facility-student group-fiscal year, etc.  Each of these “elements” is defined in FASRG.  A “fund” is identified with three digits and begins the string of codes: 199 is general operating fund, 699 is capital projects, 599 is debt service, etc.  A “function” is a two-digit identifier with 11 for direct instruction, 36 for co-curricular, etc.  Facility codes define campuses or other “units” within the district:  001 is a high school. 041 is a junior high, 702 is for school board, etc.

What is TEA’s “Data Collection Process”?

TEA collects local data four times each year.  The collections include specific data elements with no local detailing.  Local campuses collect money for campus/principal activity, student activity, general operating fund, school lunch fund, etc.  None of this detail is reported to TEA and TEA has no interest in local details.

How is PEIMS being used?

All of TEA’s financial and performance reports are based on the data that is collected from local school districts.  Local schools report only totals in pre-determined categories.  Total debt can be found in Fund 599, capital projects totals are identified by fund 699, principal’s fund 461 is not reported to PEIMS but student fund 865 is reported.  PEIMS coding is being abused by educrats who utilize coding “elements” for reporting to TEA, but do not use account code structures to facilitate the unraveling of local activity.

How does the “account code structure” differ from the “coding elements”?

The account code structure contains a mandated sequence of codes which define/explain the financial transaction:  Where did the money come from and where did it go.  The coding elements are the individual codes and do not provide any context.

What is the “chart of accounts”?

FASRG requires all school districts to maintain a locally-controlled “chart of accounts” for defining any and all locally-used PEIMS codes.  Local options are offered in FASRG but they are of no interest to TEA.  If a school district wanted to detail its expenses for a bond project, it has the option of using the 600 series of fund codes for designating expenses to specific projects:  622 as the high school swimming pool, 647 as the principals’ new offices, 688 as the junior high school track, etc.  Similarly bond activity could be controlled using the 500 series of fund codes.  The bonds purchased in 2003 could be assigned 515, those purchased in 2004 might be fund 516, etc.  This would give a clear and precise method of controlling local receipts and expenditures.

What is my particular school district doing?

There are varying degrees of abuse.  Friendswood ISD’s extensive abuses were revealed during the discovery phase of my lawsuit.  After three requests for documents, I finally received a locally-maintained chart of accounts which confirmed my suspicions:  no local details are accessible to the legislatively-designated users of this information.  FISD uses only the fund and receipt codes for “miscellaneous athletic revenue, general operating fund” [1997-X575202].  The “7” is in the incorrect position for placement in the “account code structure”; the “X” is a local anomaly; the “02” is a locally-used code of which there are several hundred permutations and/or combinations.  Similarly, the principal’s activity fund is not reported to PEIMS and thus FISD’s local use of coding is designed to prevent financial accountability: 8657-36-104-99-276 X575507.  This is FISD’s internal coding for receipt of funds for production of elementary school (Windsong) yearbook (according to R4/Pentamation computer print-out 4/26/07).

Schools can – and do - obfuscate local codes

The obfuscation of financial activity through use of secretly coded “local options” prevents comprehension of details.  PEIMS identifies fund 865 as student activity, function 36 as cocurricular/extracurricular; and program intent code 99 is for “undesignated” money.  The following codes, extracted during discovery in a lawsuit, show that local and unexplained use of codes 202, 276 and 236 succeed in providing local educrats with a tool to manipulate financial reports.  The combinations of 99-202, 99-276, and 99-236 allow local slush funding of three categories which should clearly remain accounted for separately.  This is only the tip of the iceberg

8657-36-104-99-202 X575507 YEARBOOK WINDSONG

8657-36-104-99-276 X575507 LIBRARY WINDSONG 

8657-36-104-99-236 X575507 SCIENCE WINDSONG   

Where do you start?

You must first accept the fact that your school district is deliberately hiding money from you and will not easily part with the details.  This is not considered a character flaw by Educrats, it is their way of protecting what they truly believe is theirs – your money.  If I were just beginning my research, I would ask for a complete “chart of accounts”.  Some school districts maintain these online.

What details will you get?

It depends on how the request for public information is submitted.  Always ask in writing.  This triggers the Texas Public Information Act and the associated timelines and requirements.  Meeting with school officials informally and requesting the information verbally is not recommended because this generally creates more confusion than transparency.  You might want to ask for some help in composing your public information requests.  There are many ways to ask for the same information.  You might have to experiment with different wording until you are successful. 

How easily are you put off?

Are you waiting for an opening on the school’s payroll?  The school district is often the largest employer in a community and spends most of its hefty budget locally.  The superintendent is the only person in the district who can recommend an employee for hire … power beyond belief, indeed.  Stop now if you have any aspirations of working for the school district in any capacity.  If you start asking questions (no matter how innocent) your brother-in-law can forget that no-bid contract on the $40 million junior high school.  Stop now if you want the well-respected people in the community to invite you anywhere.  Does the word “shunning” scare you?  If so, retreat into ignorance and enjoy the benefits that accompany your status as a go-along-get-along Gal!

Now what?

Are you willing to go forward?  Expect disappointment and frustration, but know that you are not alone.  None of us has all the answers, but we can help each other – and must do so for our children.  Call me at 713-534-2939 if you have any questions, or email me at nckessling@gmail.com.  I look forward to hearing from you.

                                                                                                                     Kindest regards,

                                                                                                                      Nancy Kessling

                                                                                                                     July 28, 2008, Friendswood TX

 NOTES ♦ NOTES ♦ NOTES ♦ NOTES ♦ NOTES ♦ NOTES ♦ NOTES ♦ NOTES ♦ NOTES ♦ NOTES

The past twenty-four years of deliberate obfuscation, manipulation and misuse of PEIMS coding requirements by entrenched Educrats

has rendered the entire statewide data base as unreliable.  That is the reality that your local educrats have created because they

don’t want you to be able to follow the money.  Local control is nothing more than local chaos.

·        The devil is in the details.  And he's hiding for a reason.

Texas public schools are required to record and report financial activity using a mandatory system of coding which is called “peems” (PEIMS).  Use of the Public Education Information Management System is mandated by the Texas Administrative Code and the details of the coding system can be found at the Texas Education Agency website: tea.state.tx.us.gov

·        Account Code Structure

The PEIMS data collection process does not require any reporting to the Texas Education Agency of local details.  TEA conducts four data collections each school year and these collections consist of totals that TEA uses in its analysis of school spending performance.  TEA has no interest in the local details and the Texas State Board of Public Accountancy has no interest in the integrity of the locally-hired “independent” auditors.  The result is that the database which is collected by TEA does not contain any information which is useful for local citizens in deciphering the financial activity of their particular school district.

·        Chart of Accounts

TEA’s FASRG defines most codes very clearly, but offers districts the use of local options and requires that any local options used by school districts be made available.  Some school districts post this information online, but others (such as Friendswood ISD) will only make this information available if you go to Court.  After two or three “discovery” requests you might find enough information to work with.

·        What do you want to learn?

Public school districts are not required to create documents in response to a request for information.  You must make a written request for specific documents in order to expect protection under the Texas Public Information Act. 

Example:  If you want to know how much money your high school athletic department receives in gate receipts for a particular sporting event you must specify the date of the event, the team involved, the location, the time and any other specific information in your possession.    

Statutes written to protect public inquiries:

“Format for copies of public information (a) If a requesting party asks that information be provided on a diskette or other computer-compatible media, and the requested information is electronically stored, the governmental body shall provide the information on computer-compatible media.” [Texas Administrative Code, Title 1, Part 3, Chapter 70. §70.6] 

“Informing the Public of Basic Rights and Responsibilities under the Public Information Act (a) Pursuant to Texas Government Code, Chapter 552(a) Pursuant to Texas Government Code, Chapter 552, Subchapter D, §552.205, an officer for public information shall prominently display a sign in the form prescribed by the Texas Building and Procurement Commission.

(b) The sign shall contain basic information about the rights of requestors and responsibilities of governmental bodies that are subject to Chapter 552, as well as the procedures for inspecting or obtaining a copy of public information under said chapter.

(c) The sign shall have the minimum following characteristics: [Texas Administrative Code, Title 1, Part 3, Chapter 70, Rule 70.11]