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IPS fires Hineline as CFO

Indianapolis Public Schools’ chief financial officer, Debbie Hineline, was terminated tonight following recent revelations that the district’s budget deficit was inflated.

The termination was Superintendent Lewis Ferebee’s recommendation and the board agreed by a 7-0 vote as part of a broader set of personnel recommendations.

“It was performance,” Ferebee said when asked to elaborate on the firing after the board meeting. “That information was shared directly with Mrs. Hinline and the board.”

Ferebee said his own investigation revealed oddities in IPS’s budget he has characterized as intentionally misleading. He discovered expensive projects that were never completed were kept in the budget, probably over several years. This lead board members and the public to believe IPS had a $30 million in 2013. In fact, Ferebee said, there was no deficit at all. The district finished last year with a modest surplus.

But Hineline and Ferebee’s predecessor, former interim Superintendent Peggy Hinckley, have disputed his assertions, insisting IPS remains in danger financially if it doesn’t take steps to drastically reduce costs. In an interview with the Indianapolis Star today, Hineline said she had done nothing wrong and was convinced IPS still faced a deficit in the neighborhood of $20 million.

Ferebee declined to discuss his differences with Hineline and Hinckley about the deficit.

“I’m not going to get into a back and forth on what’s right and wrong,” he said.

The official reason for Hineline’s termination was “unsatisfactory work performance.” She worked IPS for five years after 14 years with the Indiana Department of Education, including serving as school finance director.

Rhondalyn Cornett, president of IPS’s teachers union, said her members are paying close attention to the deficit story and want answers.

“They were emailing and emailing like crazy asking, ‘where’s our money?’ ” she said.

Even so, Cornett was not ready to place the blame on Hineline, who she said should not have been fired.

“I think there’s a lot more to it than what’s been said,” Cornett said. “I don’t know that it’s really been explained to the public how the budget works. Until they finish the audit people are going to keep speculating.”

Ferebee said two reviews of the district’s finances will be conducted, one by the Indiana State Board of Accounts and another by the Council of Great City Schools, an alliance of large urban school districts. That process, he said, would begin in April and be finished by June.

Hinckley has acknowledged she knew spending projections in IPS’s budget might have been too high, but has said she doubted that budgeting process could have resulted in a completely phony deficit. Even if Ferebee is right, she said, IPS should look at school closing and other options to reduce its spending to match declining revenues.

Ferebee agreed that revenues are not likely to grow but said IPS’s financial position was stable enough to allow for another school year without closings. That would permit him to devise a wider plan for managing the districts school buildings.

A recent study of IPS by the Indianapolis Chamber of Commerce noted that districts has large amounts of unused space in its buildings. It proposed selling some IPS buildings located on valuable property and seeking partners, such as community groups and social service organizations.

Ferebee has other ideas, too. Last week, lawmakers passed a bill he helped write that would allow IPS to share building space with charter schools and count their test scores in its district averages in return. The bill also permits IPS to contract with charter organizations or other groups to run low scoring IPS schools.

He also has said he wants to re-examine the district’s grade configurations to see if middle school students might be better served if they were located in elementary schools rather than community high schools for grades 7 to 12 and magnet schools that serve grades 6 to 12.

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