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LAUSD Candidate Andreas Farmakalidis on The Budget

How would he ensure transparency and accountability as the school district spends $18.8 billion per year educating students?

By Carl J. PetersenPublished 4 months ago 9 min read
Andreas Farmakalidis (from his Twitter feed)

“I do support charter schools, their ideas and innovation, but they need to be regulated.”

– LAUSD BD3 Candidate Andreas Farmakalidis

Andreas Farmakalidis is one of five candidates challenging incumbent Scott Schmerelson for the LAUSD Board District 3 seat. During the campaign, he has actively engaged with the voters by answering all the questions in the Candidate Forum series including those about PROP-39 Co-Locations, Special Education, Governance, and Student Safety.

For the January entry in the series, Farmakalidis was asked five questions related to the budget. For background on this subject please read the article LAUSD Candidate Forum: The Budget.

These are the candidate’s answers, edited only for format:

  • Would you have a financial professional independently evaluate the budget presented by the Superintendent before voting on its approval? YES YES YES YES

Even though I have experience handling major budgets, it's crucial to emphasize that I am not a financial professional or economist. Recognizing the complexity of budget analysis, seeking an independent financial professional becomes even more imperative. Their specialized knowledge and skills bring a level of objectivity and expertise that goes beyond my own experience, ensuring a comprehensive and unbiased evaluation of the superintendent's budget.

Having a financial professional independently evaluate the budget presented by the superintendent adds an extra layer of scrutiny and expertise to the decision-making process. Financial professionals possess the knowledge and skills to assess the budget's accuracy, feasibility, and alignment with fiscal responsibility. Their objective analysis can help identify potential areas for improvement, assess the impact on financial stability, and ensure transparency in the budgeting process.

This independent evaluation not only safeguards against potential errors or oversights but also enhances the overall credibility of the budget. It demonstrates a commitment to responsible financial governance, providing stakeholders with confidence in the budget's accuracy and the integrity of the decision-making body. Ultimately, seeking external financial expertise contributes to a more thorough and well-informed evaluation before casting a vote on budget approval.

  • At a board meeting on September 26, 2023, Chief Business Officer (CBO) David Hart stated that the Superintendent's budget overestimates expenditures and underestimates revenues. Do you agree with his claims that this is a best practice? NO COMMITMENT

Potential benefits of underestimating revenue and overestimating expenses:

Creating a safety net: By building in a buffer by underestimating revenue and overestimating expenses, the budget becomes more conservative and less susceptible to unforeseen shortfalls. This can provide reassurance and help avoid difficult situations where expenditures may need to be cut quickly.

A challenging budget with seemingly ambitious revenue targets can encourage departments and staff to strive for higher performance and achieve better results. It can also foster a sense of efficiency and cost-awareness.

Moreover, Presenting a budget that projects a potential surplus can be politically advantageous, leading to increased public support and potentially smoother approval processes.

Potential drawbacks of underestimating revenue and overestimating expenses:

Significant discrepancies between budgeted and actual figures can raise concerns about transparency and accountability within the district. This can erode public trust and lead to accusations of manipulation or mismanagement. Overestimating expenses might result in unnecessary budget padding, leading to potentially wasted resources that could be better utilized for educational programs or initiatives. Basing long-term financial decisions on an overly optimistic budget can lead to unrealistic expectations and create difficulties in adjusting to future financial realities if revenue expectations fall short.

Therefore, whether CBO Hart's statement regarding the Superintendent's budget reflects a best practice depends on several factors and it also raises some questions and concerns.

Is it meant to be a conservative estimate for planning purposes, or is it aimed at motivating performance and securing public support?

Are the underestimation of revenue and overestimation of expenses based on a realistic assessment of past trends and future projections?

Can the district withstand potential shortfalls if the optimistic revenue targets are not met?

Is the rationale behind the budget assumptions clearly communicated to the Board and the public?

  • At the September board meeting, Hart also stated that expenditures in 2022-23 that should have come from the general fund had come from COVID-restricted funds. Will you take the steps necessary to ensure that in the future LAUSD complies with rules regarding one-time funding? YES

To navigate this situation effectively and regain public trust, LAUSD needs to implement Immediate and long-term strategies in order to address both the current problem and prevent future occurrences.

A thorough, independent audit is crucial to assess the extent of the issue and identify specific instances of non-compliance. This will provide a clear picture of the financial situation and inform further actions.

A good idea would be for the LAUSD to collaborate with state and federal funding agencies to establish a responsible plan for repaying improperly used funds. This could involve reallocating resources, seeking additional funding, or negotiating timelines for using COVID-restricted funds.

Internal controls within the district's financial department are essential to prevent future misuse. This includes establishing clear budget guidelines for one-time funding sources, strengthening accounting procedures for accurate tracking, and implementing regular reviews and audits with transparent reporting mechanisms.

After these actions we should establish Long-Term Strategies.

Moving forward, LAUSD needs to prioritize long-term financial planning with REALISTIC projections for both expenses and revenue streams. This will help make informed budgeting decisions and reduce dependence on one-time funding sources. To create a more stable financial future, LAUSD should actively explore diverse funding options beyond federal grants. This could involve seeking local partnerships, encouraging donations, and investigating alternative revenue streams. Additionally, partnering with local organizations such as the rotary, chamber of commerce and city council will help lausd seek alternative funding and accept more grants and donations.

LAUSD needs to regain trust by consistently and transparently sharing information about the district's financial situation, budget allocations, and one-time funding utilization, LAUSD can rebuild trust and garner community support for responsible financial management.

If Board members are refusing to hire a financial professional/economist then they should receive comprehensive training on their financial oversight responsibilities, particularly regarding the rules and limitations surrounding one-time funding sources. This will ensure informed decision-making and prevent future missteps.

: At the state and federal levels, LAUSD should advocate for legislative changes that clarify the guidelines and restrictions surrounding one-time funding for education. This will reduce ambiguity and minimize the risk of misuse across the board.

By taking these multi-layered actions, LAUSD can address the current issue head-on, regain public trust, and build a sustainable financial future that prioritizes the needs of its students and supports long-term educational success.

  • The ending balance projected for 2023-24 reported in the first interim financial report is nearly $5.6 billion. This effectively reduces the total amount of funds spent on schools. Should the ending balance be allowed to reach this level? NO COMMITMENT because i do not have all the information

The projected ending balance of $5.6 billion for LAUSD in 2023-2024, as reported in the first interim financial report, raises a complex question about the appropriate level of reserves for the district. I never claimed to be a financial professional or economist however this issue brings up certain concerns.

Firstly, I am concerned about Financial stability. A large reserve provides a buffer against unexpected expenses or revenue shortfalls, promoting financial stability and protecting against cuts to essential services during economic downturns.

Secondly, The excess funds could be used for strategic investments in schools, such as infrastructure upgrades, technology improvements, or educational programs.

The State regulations require school districts to maintain a certain level of reserves. Is the 5,6 billion dollars significantly higher than the minimum requirement? Whether it's an appropriate level is a complex question with various perspectives depending on priorities and considerations like potential future needs. - I do not have an agenda on future expenditures.

On the other hand, keeping money in reserves instead of spending it directly on students could mean missed opportunities to improve educational outcomes.

If the funds are not being used then the funds are not being directed towards schools serving the most disadvantaged students.

I am a taxpayer and as a taxpayer I feel that my (our) money is not being used effectively when large reserves are maintained. Ultimately, the decision of whether the $5.6 billion ending balance is appropriate is a complex one with no easy answer. It depends on a variety of factors, including the district's financial health, future needs, and priorities.

Transparency and accountability are essential to ensure that the public trusts the district's use of its financial resources.

  • Year after year, past and present Superintendents have warned of an impending “fiscal cliff,” where the current and following year’s budgets are in balance but the third year’s budget is dangerously close to running a deficit. In no case has this deficit shown up when the next year’s budget was presented. Would you commit to being more transparent with the public in how the budget is presented? YES

LAUSD's "fiscal cliff" raises concerns about budget transparency and the potential for misleading projections. Openly sharing detailed budget assumptions, methodologies, and risks associated with projections would foster trust and understanding among stakeholders. This can lead to more informed public discourse and constructive engagement in budget decisions.

A step that should be taken is to Establish independent budget oversight committees. Creating committees with financial expertise to review and provide feedback on budget proposals, promoting independent scrutiny and public confidence.

Ultimately, striking a balance between transparency and responsible communication is key. By openly sharing relevant information while ensuring clarity and accuracy, LAUSD can rebuild trust with the public and ensure informed decision-making for the district's financial future.

  • Do you have any other thoughts that you would like to express about this subject?

Transparency has been a recurring issue, with discrepancies between projected deficits and actual outcomes raising questions. Ensuring efficient and equitable resource allocation within the budget. This may involve:

Targeting funds towards initiatives with the highest impact on student success.

Addressing disparities between schools and closing funding gaps.

Investing in professional development for educators and support staff.

I always advocate and support Community engagement. Mobilizing community support for increased funding through advocacy campaigns, parent groups, and partnerships with local businesses.Exploring alternatives beyond federal grants, such as:

Local funding initiatives like ballot measures or partnerships with private donors.

Grants and sponsorships from educational foundations and corporations.

Innovative revenue streams like partnerships for infrastructure projects.

I do support charter schools, their ideas and innovation, but they need to be regulated. However, keep in mind that when students enroll in charter schools, the funding that follows them would have otherwise gone to traditional public schools in the district. This can lead to budget cuts for traditional public schools, especially if charter school enrollment grows significantly. LAUSD is still responsible for some administrative costs associated with charter schools, even though they operate independently. This can add to the district's financial burden. In some cases, charter schools receive more funding per student than traditional public schools. This can create an uneven playing field and exacerbate inequities in the education system.

If we observe education systems around the world such as Finland and Sweden, which arguably are considered the best educational systems of the world, they have no dedicated charter school system. Here in the USA they are a big part of our district.

At the end of the day it's not about what type of school will dominate. It's about ensuring that every student will have access to quality education.

____________________________

Carl Petersen is a parent advocate for public education, particularly for students with special education needs, who serves as the Education Chair for the Northridge East Neighborhood Council. As a Green Party candidate in LAUSD’s District 2 School Board race, he was endorsed by Network for Public Education (NPE) Action. Dr. Diane Ravitch has called him “a valiant fighter for public schools in Los Angeles.” For links to his blogs, please visit www.ChangeTheLAUSD.com. Opinions are his own.

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About the Creator

Carl J. Petersen

Carl Petersen is a parent advocate for students with SpEd needs and public education. As a Green Party candidate in LAUSD’s District 2 School Board race, he was endorsed by Network for Public Education (NPE) Action. Opinions are his own.

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Comments (1)

  • Alex H Mittelman 4 months ago

    Well written! Great work!

Carl J. PetersenWritten by Carl J. Petersen

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