LAUSD Candidate Janie Dam on The Budget

“To prevent misappropriation of funds, a competent and independent public advisory council should be established to watch the cash flow and red flag potentially inappropriate fiscal behaviors whether inadvertent or intentional.”

– LAUSD BD3 Candidate Janie Dam

Janie Dam 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, Dam 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

In anticipation of deep budget cuts combined with candidates endorsed and funded by special interest PACs potentially remaining or getting elected onto the Board, it is an imperative to conduct a professional, comprehensive, independent external audit to inform and evaluate all district spending proposals prior to approval. The superintendent should view such an audit as a useful impartial fiscal management tool for his team and welcome rather than resist it.

• 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

Overestimate and underestimate by precisely how much? In my opinion, overestimating and underestimating aren’t good practices in general, and may result in a loss of confidence among the tax-paying public. I prefer precision. I would instead focus on generating as exact a projection of revenues as possible, based on All the data, metrics, analytics available, and then plan for school programs based on an expenditure level >2% below and never exceeding the projected revenues level. Reserves should always be kept at or above the required 2% to cover any shortfalls detected towards the end of the fiscal cycle.

There should be plans to replenish the reserves. If the measured level of revenues is relatively low per student and/or per budget item line, I would apply both old, time-tested and new, innovative ways to cut costs such as removing waste, negotiating for volume discounts, automating, 4-day work/school week.

• 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

The district is obligated to make sure that funds coming from one-time funding is spent on activities that the one-time funding was earmarked for. To prevent misappropriation of funds, a competent and independent public advisory council should be established to watch the cash flow and red flag potentially inappropriate fiscal behaviors whether inadvertent or intentional.

• 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

I would need more fact checking and more context for the $5.6 billion interim figure to comment.

• 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? NO COMMITMENT

In my opinion early warnings are useful. However, there appears to be a risk for a “boy who cried wolf” scenario here. Transparency achieved through clearly presenting all the budget numbers with succinct explanatory annotations and infographics may be more helpful to the public.

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

Hard times demand greater attention to budget management. Managing large school district budgets requires careful planning, strategic decision-making, and effective communication. As a Board Member I would advocate for district managers both at the central and school site levels to proactively and professionally take following steps:

1. Gain familiarity with the budgeting process - budgeting cycle and sources of revenues.

2. Gain familiarity with district educational priorities, goals, objectives regarding student learning and achievement and the rationale behind them.

3. Gain deeper understanding of how funded programs and initiatives directly impact student learning and achievement to meet district priorities, goals, objectives.

4. Align the budget you supervise with specific district educational priorities, goals and objectives.

5. Present budget details in an easy-to-understand way to stakeholders and partners in order to maintain budgetary transparency.

6. Continuously engage with all stakeholders and partners and seek their input regarding the budget.

7. Establish an accountability mechanism to track outcomes of budget allocations, expenditures.

8. Regularly compare the budget’s actual performance against previous projections and adjust as needed.

9. Regularly, timely, universally report out on (a) budget decisions, (b) the outcomes of budget decisions, whether positive, negative or lacking, and (c) the plan to redress the lacking or negative outcomes.

10. Prioritize student learning in allocating resources and in evaluating programs and resources for funding.

11. Use data to inform decision-making.

12. Explore cost-saving measures without compromising educational quality.

13. Maintain at the very least a 2% reserve fund for emergency expenditures and shortfalls.

14. Retain legal counsel as needed to ensure regulatory compliance.

15. Invest in financial literacy and budget management professional development for staff under your supervision.

16. Conduct end-of-year debriefing and provide an easy-to- understand infographic comparing actual vs. projected budget performance for the year and make it public.

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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.