INEPTNESS FORCES BISD TO TAP INTO FUND BALANCE AGAIN

"The $457.3 million local maintenance and operating budget includes a deficit of $7.06 million on the expenditure side compared to anticipated revenues."
The Brownsville Herald, June 12, 2014

By Juan Montoya

True to form for the current chief financial officer, for the first time in four years, the Brownsville Independent School District is tapping into its dwindling reserve fund to balance a deficit budget.

Chief Financial Officer Lucio Mendoza told members fo the BSD budget committee and the local newspaper that the district's budget will total $457.3 million for local maintenance and operation, $19 million for debt service and $67 million in federal funds.

And where will the CFO and administration go to address the deficit? To fund balance, of course, a fund that is now reportedly swindling to near $34 million.

Of course, this was to be expected. If we go back and look at Mendoza's resume and performance at the Mission Independent School District, it might have been expected.

Before he was hired by the board majority in 2013 – Cesar Lopez, the late Enrique Escobedo, Minerva Peña, Hector Chirinos and Otis Powers – (trustees Catalina Presas-Garcia and Luci Longoria voted against), Mendoza had racked an unimpressive records at Mission.
Records indicate that although local and immediate sources of revenue, state program revenues, and federal program revenues increased at the Mission ISD every single year there from 2011 to 2013, and the total budgets for the three years were $140,755,000 (2011), $146,204,309 (2012), and $152,201,509 (2013), Mendoza managed to run a deficit each one of those years.
In 2011, the deficit was $416,747. In 2012, the deficit grew to $5,391,160. In 2013, his last year at the helm as CFO there, the district had a $16,565,429 deficit.

Many CFOs like to say that these are not really deficits, but rather that these are "shortfalls" between revenues and expenditures that have been solved by a mere transfer from fund balance to the operating budget. We guess that you can put lipstick on a pig, but it will still remain a pig, won't it?
And what would you expect from Mendoza since the BISD budget chairman is none other than budget-challenged trustee Jose Chirinos. Jose can't you see?
Of course he can't. A forensic and an internal audit of the BSD Transportation Department while under Chirinons' watch indicated that he was a favorite of the overtime-loving bus drivers' union and supplies vendors.
A forensic budge put together for the district found that as head of transportation Chirinos managed to accomplish the following:
– Let's start with the little things. Chirinos kept something called an "Activity/Motivational Fund Account" in his budget which came from the profits of the vending machines at Transportation against BISD policy. That was put to an end with no accounting of the proceeds and the money now goes to the district's miscellaneous revenue fund like all other departments. It was, in other words, a slush fund.
The auditors found an inventory that kept steadily growing from 2007-2008 to 2010-2011, finally decreasing in 2011-2012, when Chirinos was gone.
* During those four years, the accumulated inventory increased by $325,868. It wasn't until Art Rendon took over in the 2011-2012 budget that it decreased by $277,749.
* Of the 3,841 parts with a value of $792,535 in inventory, approximately 698 items with a value of $89,144 had become obsolete. The parts no longer fit any of the buses on the district's fleet. The district had to eat the loss.
* The useful life of 46 tires worth $5,020 had expired. These tires could no longer be used or sold.
* Variances in the inventory due to "miscounts, theft, disposal or removal from inventory without corresponding record" totaled $16,092.
The auditors recommended that the department implement a "just in time" outsource method with vendors that would reduce inventory, and save warehouse space and costs. That "JIT" system is now in place.
When the auditors visited the Transportation warehouse in 2012 they found it stacked to the roof with and "excess amount" of miscellaneous office supplies that included three LaserJet printers still in the box that had been purchased in 2009 and 2010. Cases of paper clips, file folders, computer paper and other office supplies filled the sides of entire walls.
* Curious to see whether a sample audit of 200 fixed-assets would turn up any discrepancies, the auditors found that a camera worth $589, a battery backup worth $477, at least four radios worth over $300 and an external hard drive worth $263 were missing.
* During a 100 percent fixed-assets inventory, auditors discovered that 11 items totaling $100,377 could not be located in the department.
But it was the overtime budget under Chirinos that caused the most concern for the auditors. Until he left, the  overtime charges ballooned unchecked. When asked about it, Chirinos said that the unions (Ms. Petra Ramirez's outfit) and the past administration prevented him from acting. Here's a breakdown by year:
                          Overtime Pd.                                 Increase                           Decrease
2008-2009        $2,142,468
2009-2010        $2,976,557                                  $834,089
2010-2011        $2,407,735                      (under Rendon)                             $568,822
2011-2012        $1,455,725                                                                           $952,009
It's already mid-June and there isn't a semblance of a budget in place. And in fact, even as rumors abound that the administration – under the goading of some trustees – want former CFO Tony Juarez canned, his skills as a PhD in accounting and years of experience putting together BISD budget is critical to the district.
What would you rather have, political hacks trying to put together loose ends, or professionals who look out for the interests of the local taxpayer?