Budget director leaves amid questions of misspent DISD 'at risk' funds

NEWS 8 INVESTIGATES

DALLAS – Dallas ISD critics are accusing Superintendent Mike Miles of playing a financial shell game with tax dollars.

In March, a group of DISD parents and taxpayers alleged DISD officials were taking money from "at-risk" students and using it to pay for elite and magnet schools and building-up of financial reserves.

At the time, Superintendent Miles blasted critics and WFAA for suggesting money intended for "at-risk" students was being misused.

But in the past few weeks, after News 8 started asking new questions, DISD's budget director has resigned and DISD officials now admit mistakes have been made and "necessary corrections" are being made to the budget.

By law, "at-risk" students qualify to receive more in supplemental money. But all students should receive roughly the same amount of what's called "regular" classroom education dollars.

At Lakewood Elementary School, where only 14 percent of students are economically-disadvantaged, the school gets almost $4,700 in "regular" education dollars per child. But at Russell Elementary, where 97-percent of students are economically-disadvantaged, the school gets only $2,300 per child.

DISD officials make up for that by giving Russell an extra $1,600 per child in what's called "State Compensatory Education" funds. Those are state dollars dedicated to "at risk" kids.

Again, by law, that Compensatory Education money is supplemental. It's supposed to be added to the regular classroom education dollars.

So in theory, disadvantaged Russell Elementary kids should be getting their $1,600 supplemental dollars on top of those regular dollars.

If Russell Elementary students were getting that $4,700 regular dollars that the Lakewood kids get, the supplemental would kick them up to $6,300 per pupil. But since DISD only gives Russell $2,300 per student and makes up the difference with supplemental funds, critics are blowing the whistle.

"They are supplanting regular funds - which should be supplemental - and instead, you are supplanting," said DISD watchdog Bill Betzen. "That is illegal."

Betzen filed a federal complaint in March accusing DISD of short-changing disadvantaged students, like those at Russell. Betzen has now filed an amended complaint based largely on discoveries made by News 8.

  • See the Title VI complaints filed against Dallas ISD at the bottom of this story

Stevens Park Elementary is another school allegedly being unfairly funded. The school receives $2,700 per child in regular classroom education money and nearly $1,400 in supplemental money. We found similar funding disparities at other "at risk" schools.

We showed the records to DISD Trustee Bernadette Nutall, a critic of Superintendent Miles.

"I wonder if we are supplanting," Nutall said. "That's a bad word. You cannot supplant."

We also found funding disparities at DISD high schools. One example is the Talented and Gifted High School at Townview Magnet Center, which is rated the "best high school in America," according to US News and World Report.

According to state financial records the school receives $4,100 per student in "regular" classroom education dollars, plus $3,000 per student from another supplemental fund called "High School Allotment."

High School Allotment money is designed to help "prepare underachieving students to enter college," according to state records. Yet, the academically-challenged Sunset High School receives only $2,800 regular education dollars per student and only $93 in High School Allotment money.

In our interview two months ago, DISD Budget Director Gilbert Prado had difficulty explaining the disparities.

"There have been some areas that we needed to look into a little deeper and try to see where [the discrepancies] were surfacing from," Prado said.

News 8 has now learned DISD budget officials have re-coded and returned money back to the budgets of schools allegedly being shorted "regular" education dollars.

At Stevens Park, that $2,700 per student is suddenly budgeted to nearly $4,000. At Russell Elementary, that $2,300 per student in "regular" funds is now budgeted for $3,600 per child.

Betzen says it appears DISD officials have been caught short changing "at-risk" kids, which is what his original complaint alleged in March.

"They obviously knew what they were doing was wrong, and so they had to correct it when they found that somebody was looking at it," Betzen said.

Just days after our interview, DISD budget director Gilbert Prado quit to take a similar job in Garland, even though he says DISD offered him more money to stay. He claims he leaving has nothing to do with funding questions at DISD.

It's important to note his boss, DISD Finance Director Jim Terry, has declined repeated requests for an interview on this topic, as has Superintendent Mike Miles.

The Title VI complaint filed by Betzen is now in the hands of investigators with the Department of Education.


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