Schools may be released from fiscal distress, state control

Tuesday, January 12, 2010

— At its Jan. 19 meeting, the Arkansas State Board of Education will consider removing the Decatur School District from its fiscal distress list and releasing the district from state control by Oct. 1.

Superintendent LeRoy Ortman has petitioned Dr. Tom Kimbrell, Commissioner of the Arkansas Department of Education, asking that Decatur Schools be removed from fiscal distress status.

In a letter to Kimbrell, Ortman pointed out the school district’s finances have gone from “precarious” to “stable” over the past 17 months, citing a 20 percent carryover in the 2009 fiscal year as evidence.

According to a letter from ADE Coordinator, Hazel Burnett, Decatur Schools have completed all activities and strategies outlined in the district’s fiscal distress improvement plan and have complied with all department recommendations and requirements for the removal from fiscal distress and state control.

“ADE will recommend the Decatur School District be removed from fiscal distress and state control (reconstitution) effective 10-1-10 (after a school board is elected and receives training),” Burnett wrote.

The district ended the 2009 fiscal year with a legal balance of $801,757, a far cry from the negative $500,000 the ADE predicted while the district was in crisis in July of 2008.

In the summer of 2008, the Decatur School District faced the possibility of being annexed into a neighboring district. It seemed the district would end 2008 with a negative balance and ADE officials predicted it would end 2009 a half million dollars in the red.

The ADE recommended annexing the Decatur schools into a neighboring school district as soon as the Fall of 2008. On July 31, 2008, the state Board of Education voted to assume administrative control over the school district and kept the possibility of annexation open for the next school year.

An audit of the district’s finances found that $2.4 million worth of manual checks were written but not recorded over a period of two years. It also appeared the district’s bank accounts had not been reconciled since September of 2005. In addition, state and federal taxes were not filed on time.

In early August, the state appointed Ortman as superintendent. With years of experience working for the Gravette School District, as well as school districts in Iowa and Nebraska, Ortman agreed to come out of retirement to help Decatur. Since that time, the school district has made a financial turnaround of well over a million dollars.

If the state Board of Education votes to approve Decatur’s petition for removal from fiscal distress and state control, one ofthe next steps will be choosing a new superintendent and holding school board elections in September.

Not many school districts have been taken over by the state and have recovered from fiscal distress, Ortman said. Especially with a superintendent that has come out of retirement to serve the schools and would now like to go back into retirement.

The law doesn’t say anywhere how to go about handing control back to a local school board and hiring a new superintendent, according to Ortman.

“We’re kind of plowing new ground,” he said.

Ortman said he has already submitted a letter to the state announcing his resignation as of June 30, 2010. He explained that he wanted to give the state as much time as possible to recruit and select his replacement. Ortman also said he is willing to continue to helpDecatur Schools as a consultant.

Ortman said the ADE legal department researched Arkansas laws and found the only time a school board election can be held is in September.

If the petition is approved, school board elections will be held in September and the new school board will be instated in October, after training with the ADE.

News, Pages 1 on 01/13/2010