Budget & Tax

Ray Carter | October 23, 2019

State officials lose track of money

Ray Carter

State government’s reputation for oversight of finances took a hit at a recent Senate study when officials discussed longstanding confusion over how much money has been placed in a fund in existence for more than six decades, and conceded they are not certain how that money has been spent.

Members of the Oklahoma Senate recently convened to consider proposals for using the State Public Common School Building Equalization Fund to address building needs at state charter schools and traditional districts that have little local property tax funding, which is typically used to pay for facilities.

Sen. Gary Stanislawski, a Tulsa Republican who requested the study, said one proposal to address the facility needs of many Oklahoma schools is to appropriate money to the existing State Public Common School Building Equalization Fund, and then disburse it through a needs-based formula. But he noted many questions remain on how that process would work.

“We have a Building Equalization Fund in the state already,” Stanislawski said. “But I don’t believe there’s an actual formula that if dollars flow in, that we can look at to see where will dollars flow out, nor to see exactly which schools would receive those dollars.”

Stanislawski said the goal of the study was to determine “how we can meet the needs of all students across our state, and make sure there are good facilities along the way.”

The building fund was created by constitutional amendment in 1955 with that provision subsequently amended in 1984. Charter schools were made eligible to receive money from the fund in 2013.

Officials have previously said the fund has never contained any money since its creation. But Brad Clark, general counsel for the Oklahoma Department of Education, surprised many officials in attendance when he reported the agency had researched the fund and learned it last received an appropriation in 1994, when about $289,000 was deposited into it. That placed the last deposit years before any current member of the Legislature was first elected.

Clark said it appears the fund received annual appropriations each year from 1989 to 1994, which ranged from $155,500 to $361,000. Over that six-year period, more than $1.4 million was deposited into the fund.

“It was my understanding that the fund had never been funded, and you’re saying there was a time it received $300,000?” Stanislawski asked.

“Yes sir, that is correct,” Clark responded.

“Okay, so then therefore there was a formula created in how those funds would be disbursed?” Stanislawski asked.

“I’m not sure about that,” Clark said. “There was never any administrative rules that I could see that actually specified how those funds were to be distributed or who was eligible to apply, the timelines to apply, and so forth. But there is, in the statute, at least some guidance as to who’s eligible and how those funds are to be provided.”

However, even that statutory language raised questions. Brent Bushey, executive director of the Oklahoma Public School Resource Center, said it is difficult “to discern what it means.”

“I’ve read it a number of times, and I’d like to give an A in creative writing to whoever wrote that,” Bushey said, “because it’s pretty darn confusing.”

Shawn Hime has been the executive director of the Oklahoma State School Boards Association since 2014. Prior to that, he spent six years as superintendent of Enid Public Schools. Before that time, he was an assistant state superintendent at the Oklahoma State Department of Education, where his responsibilities “included the management of the state aid” and “school financial accounting,” according to his official biography.

Despite that background, Hime was as surprised as anyone to learn the State Public Common School Building Equalization Fund ever contained any money.

“None of us were in this building in 1994, so no one I knew had any clue that any funds had ever been appropriated or distributed,” Hime said.

Hime said he researched the fund several times through the years, including when he worked at the Oklahoma Department of Education, and had even asked the Office of State Finance (since renamed the Oklahoma Office of Management and Enterprise Services) for information on the school building fund.

“They claimed at the time that there was no money in the fund and there never had been money in the fund,” Hime said.

Clark said the appropriations provided to the fund in the early 1990s appear to have been intended for helping schools with disaster relief, such as tornadoes. He said the fund holds $297 today.

“Through our review of it, there were never administrative rules created,” Clark said. “I think it’s time for us to get going on that if this is going to be a discussion and a process that goes forward.”

Bushey quipped that he wanted to know how over $1 million could have been placed in a state fund “and no one knows that it’s there.”

“If we could figure that out,” Bushey said, “that would be a fun research project.”

Stanislawski agreed.

“It is a good question,” Stanislawski said. “Because if they received money, how was it disbursed? There appears to be no formula for how it was disbursed. But it was disbursed, because all we have left is like $297.80 cents.”

Ray Carter Director, Center for Independent Journalism

Ray Carter

Director, Center for Independent Journalism

Ray Carter is the director of OCPA’s Center for Independent Journalism. He has two decades of experience in journalism and communications. He previously served as senior Capitol reporter for The Journal Record, media director for the Oklahoma House of Representatives, and chief editorial writer at The Oklahoman. As a reporter for The Journal Record, Carter received 12 Carl Rogan Awards in four years—including awards for investigative reporting, general news reporting, feature writing, spot news reporting, business reporting, and sports reporting. While at The Oklahoman, he was the recipient of several awards, including first place in the editorial writing category of the Associated Press/Oklahoma News Executives Carl Rogan Memorial News Excellence Competition for an editorial on the history of racism in the Oklahoma legislature.

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