Checking The Math

“Whoever is detected in a shameful fraud is ever after not believed even if they speak the truth.”

– Phaedrus

When appearing at the Northridge East Neighborhood Council’s candidate forum, LAUSD BD 3 candidate Dan Chang answered a question about the budget by citing his qualifications. “Having a math teacher,” he said, “and a budget expert and someone who really loves the numbers is just an important part of providing oversight in LA Unified.”

According to the Los Angeles Times, the LAUSD has a budget of $18.4 billion. To think that being able to teach middle school students pre-algebra prepares someone to understand such a complicated document that runs hundreds of pages is a ridiculous statement. It would be as if I said that the many airplane flights I have taken qualify me to fly the airplane; I am well-acquainted with the result of the pilots’ actions, but I have no idea what steps they have taken during the flight.

Beyond his experience as a math teacher, Chang did not specify what qualifies him as a “budget expert.” He was asked a series of questions about the budget for my LAUSD Candidate Forum series but did not provide any answers. The bio on his campaign website also does not mention anything about a work history that would be relevant to analyzing budgets or other complicated financial documents, although it does include these examples of questionable math:

• Chang takes credit for opening “17 high-performing charter high schools” while working with the Green Dot chain of charter schools
• Public records show that only 14 were opened during his tenure, six of which were so high-performing that they closed down.
• Chang claims that his privatization of Locke High School in Watts added up to a “turnaround of LAUSD’s most troubled high school.” The data shows that Green Dot’s takeover of this school was anything but successful.

Chang provided an example of his inability to dig deeply into the numbers when he claimed he could "find $120 million of cuts immediately that will not hit any local school." A person who thoroughly understood the budget would have detailed the specific cuts. Instead, Chang explains that his claim was based on the percentage of the budget spent on "administration overhead." Since the amount allocated is above what Chang claims is "best practice with what happens in public schools [in] well-run districts throughout the nation," he says it can be reduced.

Assuming Chang’s interpretation of “best practices” is correct, his analysis only signals that this spending should be investigated. Without the ability to look deeper into the numbers and understand them, it is impossible to confidently say there are no legitimate reasons for the LAUSD to spend more than other districts. Is this higher spending a function of higher costs in California? Do more staff need to be hired to meet the state’s requirements? Without this information, Chang cannot specifically say what should be cut.

While budgets provide insight into the priorities and aspirations of the District, it is even more important to track how the money is actually spent. Digging deeply into these numbers shows that the District’s bureaucrats often pad their projections leaving funds unspent at the end of the year. This is why the LAUSD continuously shows a third-year budget deficit that never results in a second-year shortfall in the next budget. Because of a lack of accountability, the public is never provided with a clear indication of what happens to these funds.

In answering the budget question at the NENC forum, Chang’s opponent, Scott M. Schmerelson, addressed this issue by discussing the salaries budgeted for positions that have not been filled in years. Eliminating these from the budget would make the money available to be spent directly on students. Despite his claim to be a “budget expert” Chang provided no insight into the issue.

As one of his many forays into the Charter School Industry, Chang co-founded the Valley Charter Schools (VCS). As the Board President for this white flight charter and a member of its Finance Committee, Chang had the opportunity to prove his budget oversight capabilities. With 513 students it would have been a much easier job than the Los Angeles Unified School District which currently has 409,518 students.

While current records for the charter schools are difficult to obtain, the minutes from the May 25, 2023, meeting of the VCS Finance Committee show that Chang was the only member present. Despite this obvious lack of quorum, Chang still had a “discussion of exploration of Employee Retention Credit (ERC).” These notes indicate that even though the State of California held schools harmless during the COVID-19 pandemic and did not reduce funding, Valley Charter Schools took $793,500 from the PPP program, depriving small businesses of money that could have saved them from bankruptcy during the crisis. It also notes that they would pay a 10% fee, presumably to an outside company, to apply for the program instead of doing it themselves. An incomplete sentence suggests that they planned to invest the money instead of spending it directly on students to help them recover from the effects of the pandemic.

With more recent records not available to the public, it is impossible to say if Chang’s charter school eventually took money from the ERC program. If it did, this could signify a serious lack of judgment by someone who now wants a seat on the LAUSD Board. The IRS has warned of pervasive fraud in this program and has aggressively sought penalties and interest from those making erroneous claims. At the time it was forced to close, the North Valley Military Institute (NVMI) was being investigated for how it handled these funds. If Chang allowed the Valley Charter Schools to be hoodwinked by a bad actor in an ERC scheme, this would not reflect well on his ability to provide oversight the LAUSD desperately needs.

While Chang is correct that the current LAUSD Board Members do not have the necessary skills to oversee the budget, his credentials as a math teacher do not prepare him any better for the task. Instead, the District’s stakeholders desperately need candidates who admit they need help understanding the budget and promise to hire an independent analyst with the necessary background. It is the only way to ensure accountability for the LAUSD’s army of bureaucrats.

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Carl Petersen is a parent advocate for public education, particularly for students with special education needs, who serves as the Education Chair for the Northridge East Neighborhood Council. As a Green Party candidate in LAUSD’s District 2 School Board race, he was endorsed by Network for Public Education (NPE) Action. Dr. Diane Ravitch has called him “a valiant fighter for public schools in Los Angeles.” For links to his blogs, please visit www.ChangeTheLAUSD.com. Opinions are his own.