In order to overcome continuing problems with its financial reporting, the Louisiana Department of Education has engaged an outside accountant to oversee the procedures of the Orleans Parish School Board. The reaction from school board staff has been as expected, that this action was unnecessary. However, clear and dependable accounting and budgeting are fundamental duties of any public agency, and over many periods the OPSB has not been able to overcome its own internal accounting problems. As the OPSB is a political subdivision of the state, this step by the LDOE is fundamentally its duty and is not an over-reaction, or in some way punitive.

There are fundamental dangers to the financial integrity of the school system in New Orleans. The fiscal underpinnings of the school system is faced with what the rest of city government is faced with. First, the city has not been able to overcome a shrinking economy that have driven declining sales, corporate, and personal tax revenues as well as stagnant assessed property values that have and will lead to shrinking property tax revenues.

Second, the same bad economy has caused citizen out-migration which, when added to national demographic trends of fewer children, is resulting in fewer students in schools. These population declines affect both revenues and expenses. Because state (and sometimes Federal) funding is based upon student population, fewer students mean less tax revenue. On the expense side, shrinking populations also force management decisions about spending priorities for policies and programs, as well as the number and location of schools and other assets.

The long-term expectations are that these driving factors will only get worse. In order for the Orleans Parish school district to remain viable and for education outcomes to be successful, the School Board must make data based, critical long-term decisions. To do so they must have financial and demographic data that is accurate and dependable. Given the School Board’s staff’s inability to deliver dependable reports and budget data, the action taken by the state’s Department of Education should be looked upon as a gift to the city, and as such, lauded.

Oversight is one thing. The School Board must take immediate action to place its house in order by resolving the issues in their accounting department. If not they face the real possibility of making good faith, but negatively impactful bad decisions wholly based on bad data. So that this never happens, it is their duty to act. The state’s oversight is the perfect time to make the changes necessary to fix this situation.