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Rampant mismanagement led to deficits forcing the Cape Henlopen School District to close Little Vikings Day Care, acting district Superintendent David Robinson said.
From the time former Superintendent George Stone initiated the district’s purchase of Little Angels Day Care from Linda Walls for $36,000, district office staff questioned its viability, but Robinson said they were too fearful of the consequences of speaking up to say anything. Robinson has called for a full state audit of the program and of all district finances.
Walls is the current director of Little Vikings Day Care, set to close Aug. 23.
Robinson emphasized that while Stone and his wife, Jeanne Stone, former special education facilitator, are at the center of discussions over the day care, he does not think they intended to do anything wrong. “I think Dr. Stone got into it with the intention of creating a good program … It was one of those things that got out of control,” he said.
“I don’t like what has taken place here. It doesn’t bode well for anybody. I want the truth told as I’ve heard it,” Robinson said during an interview Monday, July 26. “We’ve got this program that’s at runaway costs, and a key player in it was the facilitator, who was the superintendent’s wife,” he said. The program was funded carte blanche and not run the way anyone would run a business, Robinson said.
He said in early July, during his first weeks on the job, district office staff told Robinson the program would run a $775,000 deficit in the coming school year. Robinson reported that to the school board Thursday, July 8. Board members voted to close the day care, effective at the end of August.
In the intervening weeks, Robinson said, district office staff members are turning up more details about the day care. The district has a preschool program for students with disabilities. The Little Vikings Day Care was for children without disabilities, who served as “typical” role models for children in the preschool program. Robinson said this is a normal setup for special-needs educational programs, but for it to be fiscally viable, it should be run with a high-school education program including students to teach the children, he said.
He said Cape’s program has provided excellent services, but it costs too much. The program was funded through tuition tax money – collected by the district to fund programs for children with disabilities. Robinson said he questions whether spending tuition tax money on children without disabilities is justified; he said he thinks it is not, but an upcoming state audit should answer that question.
If the state auditors disagree with the expenditure, the district might have to reimburse the tuition tax account and drop the tax rate, he said. The district dropped the tuition tax rate by 5 cents per $100 of assessed property value when it decided to close the day care.
Disorganization
“This organization was mismanaged,” Robinson said. It’s even difficult to tell how many students are in each service, he said. There are about eight combinations of services, including pre- and after-school services, and full or part-day programs for children with disabilities.
Robinson said, there are no spreadsheets that show which children should be categorized where. “Enrollment has been difficult for us to get a handle on because their bookkeeping wasn’t what it should have been,” he said.
Enrollment numbers have risen and fallen, sometimes with as many as 100 students in the day care, he said.
Tuition tax money funded supplies and staff for the day care because day-care students were commingled with special-needs students in other district programs.
“There was no thought about the bottom line,” said Robinson.
Program lost money from start
Robinson said when Cape purchased the day care from Walls, she was hired as director and her staff was also hired. Things started to go downhill quickly as far as costs to the district, he said. In the 2008-09 school year, the district spent $208,000 on day care and received $86,000 in income, for a net loss of $122,000. In 2009-10, the day care lost $619,000 and a larger deficit was projected for the coming 2010-11 school year.
“The question then becomes how did we lose that much money?” Robinson said. “It’s a lot of money.”
Robinson said he was aware when he took the job that Cape was running the program and that it was a very good program. District business director Oliver Gumbs and special-education supervisor Jeff Conrad quickly approached him with their concerns, he said.
Walls directed the program and was supervised by Jeanne Stone, who was hired part time in 2008 and, effective January 2009, full time. She was hired as special-education facilitator and was supposed to coordinate kindergarten through fifth-grade special-needs programs, Robinson said. She supervised both the day care and the early childhood program.
“We had way too many administrators or people not teaching kids at a high cost,” Robinson said. She was paid out of a special-education grant; $76,000 in salary and $21,000 in overtime, with $24,000 in other compensation, for a total of $122,000 in the 2009-10 school year. Walls was paid $53,000 salary and $9,400 in overtime. With $2,350 in other compensation and $13,400 in benefits, she was paid a total of $91,700 including taxes the district paid.
“In education, hardly anyone gets overtime. In Little Vikings Day Care, overtime was rampant,” Robinson said.
The early childhood program has also been costly, he said; the district spent $837,000 last year on supplies, staff and materials. A large part of the programs’ costs were paid for out of stimulus funds and marked as start-up costs. Some of the purchases included furniture and toys, Robinson said.
“We spent for everything. The spending was signed off on by various employees, not necessarily Dr. Stone,” he said. “It was clearly understood in this program that what they wanted, they got,” he said.
He said Conrad and Gumbs approved the purchases. “Even though they knew we didn’t need all this, or the layers of management, to run the program, they felt intimidated and fearful of the consequences if they stepped up and challenged the decisions,” Robinson said.
Cape provides a wide variety of services for children with learning disabilities. Cape’s programs range from a few hours a week of help from district staff to all-day programs for children with severe disabilities, Robinson said. He said for children with mild problems, including hearing and speech troubles, Cape teachers will travel to meet and work with them.
“With some of these things, if you catch them early, you can correct them with minimal time,” Robinson said.
He said district staff used to visit Little Angels Day Care, before it became a district program, for children with mild disabilities, while other children came to the district’s Early Choices program. That program was run by an outside contractor and served children with more severe problems. In 2009, Cape severed its connections with Early Choices, for which it paid some $250,000 a year, said Robinson. Because of the end of the Cape contract, Early Choices closed, Robinson said, and Cape now spends significantly more for the services Early Choices had provided.
“We are committed to running our early childhood program in a cost-effective manner,” Robinson said. He said the district can provide the same high level of service while cutting costs significantly.
In 2008, the district absorbed Little Angels, which became Little Vikings Day Care.
Robinson said he has learned that when a proposal was made for the district to take over Little Angels, at least one member of district leadership advised against it.
But, former Superintendent George Stone agreed to purchase the day care’s supplies and inventory for $36,000 and absorb its staff into the district, Robinson said. “There was no business model presented, no profit-and-loss assessment,” he said. The $36,000 figure was arbitrary, he said.
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