A financial hypocrisy

It's funny ... the Olentangy Local School District prides itself on the award the district receives for its Comprehensive Annual Financial Report (CAFR), yet the superintendent likes to claim that anyone who quotes CAFR numbers for revenue and expenditures is attempting to deceive.¹

According to a district news release:

The Comprehensive Annual Financial Report (CAFR) provides a range of information on the district's financial position and is used for a variety of constituencies including area residents, federal and state governmental agencies and debt companies. The CAFR is the district's audited annual financial report prepared in accordance with accounting principles generally accepted in the United States of America.

The CAFR is comprised of three major sections: introductory, financial, and statistical. The introductory section provides general information on the district's structure, services and environment. The financial section contains the auditors' opinion, balance sheets, statements of revenues, expenditures and changes in fund balance, and budget basis statements. The statistical section provides trend data and non-financial data for additional analysis of the district.

The CAFR was judged by an impartial panel according to such standards as whether the report demonstrates a constructive spirit of full disclosure and whether it motivates potential users and user groups to read the CAFR. The GFOA is a nonprofit professional association serving approximately 15,000 government finance professionals.

Note that the figures contained in the CAFR are audited, so they are as real as any number that a government agency can produce.² But, the district's CEO thinks anyone who used these numbers is playing a game of deception.

Try it sometime. Compare the district's actually cost per pupil -- as derived from the CAFR -- with that stated in ODE reports. You will find that the CAFR figures are much higher since they include (inter alia) the capital costs of running district programs. The superintendent, board, and administration like to pretend that such costs are nonexistent, yet they are right there on your tax bill.

Keep in mind, the game being played is the movement of as much expense as possible from the operating fund to the bond funds. It's a good game, but to the contrary of the superintendent, the costs are captured on the CAFR for all to view. So, the hypocrisy belongs with the district when they attack the veracity of the CAFR figures.

One other thing to consider: The CAFR is addressed to the board and community. Take some time to read it and understand where your money is going. Then, question the superintendent about the true cost of funding the district.

Note:

1. The award is based on format and presentation, not the financial practices of the district. And, keep in mind, the district pays a consultant to produce the report. So, it's the consultant that deserves the awards.

2. The whole concept of a financial report of a government agency is more than a little bizarre. Supposedly, the owners -- the taxpayers -- can see the equity they have invested in the district. Try to cash-out your supposed investment sometime and see what happens.