Officials: possible state oversight unrelated to FBI probe

n State’s new financial scoring and $23.1 million deficit for 2001 and 2002 land district on watch list

Dr. Ellen Bueschel, interim superintendent of the Rockford School District (RSD), said talks with state officials about possible intervention of a state Financial Oversight Panel were not related to the Federal Bureau of Investigation’s (FBI) probe of the district’s computers and servers.

Naomi Greene, spokesperson for the Illinois State Board of Education (ISBE), said the district invited ISBE Superintendent Robert Schiller to discuss the possibility of “voluntary intervention” of the state overseeing the district’s finances. Schiller and Bueschel met “before Thanksgiving [Nov. 27],” Greene said.

When asked whether the district talks with the state were related to the federal probe, Greene said Schiller “couldn’t comment on that because the district has not asked us to step in.”

However, Schiller later contacted The Rock River Times about the federal investigation and his visit.

“That [the federal investigation] had no bearing on it [his visit],” Schiller said. “ I had read a newspaper report [about the investigation] prior to my getting there, and I had seen a television report on it, but that was all, I was invited up by her [Bueschel] to explain what the implications were of the financial oversight panel law.”

School Board Member Mike Williams (D-Sub-district A) said of the visit: “Initially, Dr. Bueschel said Schiller was driving through Rockford and stopped. Then she said he called her. Now I understand she called him. That was based on what Dr. Bueschel said in the Register Star.”

Schiller said: “It was not convoluted at all. I was visiting a district in Round Lake. I was invited to visit Rockford by Dr. Bueschel. After I visited the district in Round Lake, I visited Rockford the next morning to have a cup of coffee with her.”

As to the district being on the state watch list, Williams said: “It’s an example again of how the administration does not have a very good handle on our finances. We’ve been waiting to get a plan on the district finances since last spring. Now Dr. Bueschel says she thought she had until January. We are being asked to approve a budget without a plan. I think that’s irresponsible.

“Number one, we have to adopt a plan for getting us off the financial watch list . We have only two years to make significant cuts in our budget. We only have two years before we lose another 58 cents of our tax levy, which is almost $6 million in revenue. We are almost at our maximum borrowing power. Unless we have a plan, we’ll be bankrupt in two years.

“Another major thing coming up is the almost 300 teachers coming up for retirement. That’s several million dollars we have to pay into that retirement fund,” Williams said.

Financial score and deficits

According to the ISBE’s Web site, the state’s new financial assessment profile, which was implemented in 2002, uses five criteria to measure a district’s financial heath. Each of the five indicators is assigned a weighted numerical score that is added to produce a Total Financial Profile Score.

The Total Financial Profile Score places districts in one of four categories. In order of financial health, the categories are: financial recognition (4.00 to 3.54), financial review (3.53 to 3.08), financial early warning (3.07 to 2.62) and financial watch (2.61 to 0.00).

The lower the score, the worse a school district’s financial health. Rockford earned a Total Financial Profile Score of 2.35 in 2002, which landed the district on the state’s watch list.

Venice Community School District near St. Louis received a Total Financial Profile Score of 0.00. A large number of other districts received overall scores below 2.

Districts on the financial watch list include 100 of the state’s 893 school districts. Another 183 districts are on the financial early warning list. The 2001 financial watch list contained only 11 school districts. However, numbers on the watch list increased significantly in 2002 due to the new financial health assessment method.

Prior to 2002, the list was generated using a single financial indicator—fund balance to revenue ratio. The state’s Web site indicates “the 2002 list provides a more accurate snapshot of the financial status of school districts.”

According to state records, the district’s deficit spending totaled $23.1 million for 2001 and 2002, while under the leadership of former district Superintendent Alan Brown. Brown served from June 2000 until he was fired in March 2003 by the Rockford School Board.

The most recent state data show a 13.6 million deficit in 2002 (see graph on A1). The district had $214.5 million in revenues and $228.1 million in expenditures in 2002. The district’s 2001 deficit was $9.5 million with $209.4 million in revenues and $218.9 million in expenditures.

State panel

Greene said there are two ways a state Financial Oversight Panel could intervene—voluntary and involuntary. Rockford is exploring voluntary intervention, according to Greene.

As to whether or not Rockford is actually considering this option seriously, state Superintendent Schiller said, “I don’t know.”

The law mandates for the state to intervene on a voluntary basis, the district must be on the financial watch list. The local school board must then petition the state for consideration of implementing a three-member panel that is appointed by the state superintendent. The ISBE then votes whether or not to implement the panel and provide emergency financial assistance that the district must eventually repay.

FBI probe

The Rock River Times learned in late October that a federal investigation may be aimed at specific school administrators involving unauthorized conduct concerning district computer servers and personal computers (see Nov. 19 issue).

E-Blaster or spyware, a remote monitoring system, was allegedly used to enter computers not associated with the school district. The target’s e-mail was allegedly monitored to track their activity. Also, servers or laptops may have been used to conduct and host commercial businesses.

Sources allege lower-grade computers may have been purchased, with the district being charged for higher-grade computers. Sources also allege that laptops were given to some to ensure their cooperation in possible illegal activity.

School district supplies, some funded partially by federal funds, may also have been sold to commercial establishments.

To view the law concerning Financial Oversight Panels visit:, click on Illinois Compiled Statutes, Chapter 105, School Code, Article 1b.

To view the district’s financial information that was submitted to the state visit:, click on School Finances, School District Financial Profiles, enter information for School District Profile Search in 2003, click on district to download file.

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