A New Education Agency, By The Numbers

Recently there has been a lot of controversy surrounding the Center for Education and Career Innovation – a new entity that Governor Pence created last August – and its effect on the proceedings of the State Board of Education meetings. Throughout my career I have been trained to look at cases such as this from a financial impact – both when I served on the State Board of Accounts and with a top ten CPA firm. When a governmental auditor finds issues of non-compliance, they identify them as findings and potentially as “questioned costs.”

These are my findings:

1. Neither the CECI web page nor the Transparency Portal provide any budget or spending information

2. The legal basis of the “non-reverting” CECI Fund is questioned and if not reverted to the General Fund, could be identified as a questioned cost

3. The legal basis of the CECI fund transfer should be a questioned cost

4. The two executives running the CECI are receiving salaries from another agency, not from the agency they serve.  That is a potential questioned cost.

 

1. Neither the CECI web page nor the Transparency Portal provide any budget or spending information

Before I could look at the numbers, I attempted to get to the Center for Education and Career Innovation web page. If you go to the state website (www.in.gov) and click on the header at the top that is titled “Education and Training,” the new agency does not show up on the list of education-related agencies.  If you use the website’s “Find an Agency” function and look for agencies with names starting with “C” it does not show up on the list.  The only way to find the CECI web page is to use the general search function and search for the exact name of the agency.

Once I found the agency website, I tried to search for information regarding its budget.  The agency website (www.in.gov/ceci) does not give any budget or spending information, and the state transparency portal has not been updated to list the CECI as an agency of state government.

The Governor combined the budgets of the Indiana State Board of Education, the Indiana Education Roundtable, the Indiana Career Council, and the Indiana Works Council to create the new fund, however, none of those entities show any transactions in the Transparency Portal. Therefore, you cannot track the individual or combined budgets or any expenditures of the CECI.

ITP_no_results.png 

2. The legal basis of the “non-reverting” CECI Fund is questioned and if not reverted to the General Fund, could be identified as a questioned cost

In the Governor’s Executive Order establishing the Center for Education and Career Innovation, the following is stated regarding the establishment of the CECI Fund:

a. The fund shall be administered by the CECI.

b. The fund shall be non-reverting.

c. The fund may receive federal grants, where deemed eligible under federal guidelines.

The funds transferred to the CECI fund were appropriated from the General Fund, which reverts at the end of each year if unspent. But the Executive Order specifies that the funds transferred will be “non-reverting.”  There is a significant question whether an executive order can trump the general budget laws of the state. 

3. The legal basis of the fund transfer should be a questioned cost

I have been talking with many of you on the road about the State Board of Finance and how it is the only entity that can transfer appropriations among agencies and funds between sessions of the Indiana General Assembly (Indiana Code section 4-9.1-1-7).  According to the minutes posted online, a public records request my campaign submitted for the October agenda (which has not been posted), and the meeting held earlier today, the Board of Finance has not transferred the funds from the four entities mentioned above into the CECI fund.

My campaign submitted a public records request to inquire about the transfer of funds into the new CECI fund, and it appears the new fund was created on the state records, but no money has been transferred as of the date of our request.

4. The two executives running the CECI are receiving salaries from another agency, not from the agency they serve.  That is a potential questioned cost.

The state employee section of the online transparency portal discloses that one CECI executive is paid from the Indiana Charter School Board, which was not one of the agencies covered in the Executive Order, and the other employee listed on the CECI website does not have any agency source showing from where she is paid.  Yet according to an article in the Times of Northwest Indiana today, “CECI head Claire Fiddian-Green, Pence's special assistant for education innovation, is paid $120,000 a year. …Altogether, six of the 15 CECI staffers earn more than $100,000 a year.”

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This new agency is high profile and has stirred a lot of public comment.  It should also be transparent and its finances and information should be available to everyone.  It should not be established in a way that a governmental auditor would question its cost.

The Auditor of State is the lead agency for the transparency portal and is the secretary of the State Board of Finance.  As Auditor I will keep the transparency portal current to reflect the budgets and expenditures of all state agencies – old and new. Adding expenditure data to the portal at the end of each month should be a ministerial function done immediately after the monthly close-out process. I will also post updated information regarding the agenda and minutes of the State Board of Finance on the Auditor’s website. 

When an Indianapolis Star investigation last February revealed that INDOT official Troy Woodruff benefited from his and his family's sales of land along I-69 route, Governor Pence’s spokeswoman said that he “welcomes discussions about greater transparency in government." I believe that the state should follow through and be completely transparent about its newest agency.

 

Sources:

Governor Pence, Executive Order establishing Center for Education and Career Innovation: http://www.in.gov/ceci/files/EO_CECI_08_23_2013.pdf

State Expenditure Portal: http://www.in.gov/itp/2338.htm

Indiana State Auditor, State Board of Finance meeting minutes: http://in.gov/auditor/2364.htm

Times of Northwest Indiana: Taking sides in education 'civil war': http://www.nwitimes.com/news/local/govt-and-politics/taking-sides-in-education-civil-war/article_6ca2a97d-5a95-54cf-928d-43f1a735f21a.html

Indianapolis Star: Pence weighs in on I-69 land dealings: http://www.indystar.com/article/20130204/NEWS05/302040334/

 

 

 

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