ELC News - Abbott Myth3: Abbott Districts Waste Taxpayer Money

This myth is in the news lately, but it’s as old as the hills. For three decades, the State has been trying to evade its obligation to provide adequate school funding to our poorest schools by accusing urban districts of "waste and mismanagement."

It’s like clockwork. The NJ Supreme Court is now considering the Legislature’s latest attempt to reduce funding to urban school children – the School Funding Reform Act – and State education officials kick the "waste, fraud and abuse" myth into high gear.

Problem is, other than allegations and rank innuendo – usually aided and abetted by media outlets and reporters looking for a juicy headline – the State has yet to provide hard evidence of widespread waste in Abbott districts. Or offer any evidence that the Abbott school children no longer need the parity, preschool and supplemental program funding required by the Court’s "Abbott remedies."

The latest version of this tired, old story started in mid-May with the Department of Education’s sudden release of three-year-old financial audits of the Abbott districts performed by the KMPG accounting firm at a cost of $11 million. On cue, the critics came out in full force. The Star Ledger ran a front page article with this headline: "Audits Find Waste in Abbott Spending: 29% of expenditures found not ‘reasonable.’"

And the Senate Education Committee hastily called a meeting in which the audits were discussed, with much gnashing of teeth over "wasted taxpayer dollars" and the need to "recoup" money unnecessarily spent by the Abbott districts.

Of course, the Abbott districts were the only districts audited by the State. So we’ll never know whether suburban or middle-income districts are "wasting" money on professional development, school board retreats or field trips for students.

But the Senators and news reporters obviously didn’t read the audits. If they had, they’d know that KPMG did not classify any of the hundreds of millions of dollars in Abbott expenditures as "waste," "unnecessary," or "unreasonable." And at no point did KPMG find "mismanagement" in any Abbott district, or even a single instance of "fraud" or "corruption" for that matter.

If they’d read the audits, they would know that $83 million spent by the districts – out of the more than $4 billion in total Abbott spending – was classified by KMPG as "discretionary" or "inconclusive." In most cases, KPMG categorized expenditures – such as textbooks and other school spending – in this way because purchase orders or other documentation was not available, even though the spending was legitimate.

In fact, from an accounting point of view, these audits are extremely "clean." Of course, additional work is needed, in some districts more than others. But this good news is lost in the torrent of over-the-top rhetoric and inaccurate media hype.

At the Senate Education Committee hearing, even NJ Education Commissioner Lucille Davy had to concede that a few of the expenditures flagged by KPMG, such as off-site school board retreats or travel for professional development or other meetings, were perfectly legitimate at the time, and that recent DOE rules provided districts guidance on these issues.

Bottom line: if there were any serious evidence of "Abbott waste," you can bet the Attorney General would have presented it to the Supreme Court to support the funding cuts called for in the new school funding formula. But that didn’t happen.

These charges of wasteful spending by the Abbott districts are most disconcerting because they imply that the bulk of the districts’ school funding is not being used to improve educational outcomes for our state’s poorest school children.

We know that is not the case. How about all the spending to enroll over 40,000 disadvantaged 3- and 4-year-olds in high quality preschool programs and to provide full-day Kindergarten? How about the spending targeted to early literacy, tutoring and other programs that have reduced the achievement gap between suburban and urban 4th graders? How about spending that has put New Jersey among the leaders in high school graduation rates, including African American and Hispanic students?

Another Abbott myth proves to be nothing but hot air. But steam can burn, and sometimes it can be toxic. Grandstanding legislators and a careless press have led the public to believe that there is massive "Abbott waste" when, in reality, the funding has delivered long-overdue improvements in some of the poorest, most segregated school districts in the nation.

Once again it’s up to those of us who support public education to set the record straight. Careful oversight of public spending on education is an absolute necessity, but so is adequate funding for our neediest children and schools.