Idaho Board of Education lauds new plan

BOISE – Idaho’s state Board of Education acknowledged “past mistakes,” but told lawmakers Monday that it’s getting its financial house in order.

“We have corrected all of our mistakes – we have a balanced budget,” state board President Milford Terrell said. “We now can go back to work.”

Terrell acknowledged that the board office had repeatedly tried to push payments off into future years, worsening a budget deficit that ballooned into millions. “That’s wrong, and we put a halt to it,” he said. “That’s when we made the hard decisions.”

The board voted 5-2 on Monday to approve amendments to its $22 million contract with Data Recognition Corp. for the Idaho Standards Achievement Test, officially canceling ninth grade testing and making other cost-cutting changes. “We are now officially in the black,” Terrell said after the vote, adding, “We were officially in the black before.”

The board canceled second and ninth grade ISAT testing because of its financial crisis, even though ninth grade is the year before the test counts as a high-stakes graduation test for 10th-graders – a requirement of the federal No Child Left Behind Act.

As Terrell made his annual budget presentation to the Joint Finance-Appropriations Committee on Monday, lawmakers on the budget-setting panel had sharp questions about the snafu. Terrell said the new ISAT contract included a “shopping list of things,” with second and ninth grade testing, which aren’t federally required, shown as add-ons with added costs. The federal law requires testing in third through eighth grades, plus the graduation test.

“Somewhere within the (contract) response, those things were overlooked,” Terrell told lawmakers. “There were some things that Idaho has done outside of what the federal guidelines were, and that part of it was not in the funding mechanism.” Now, everything will go through four members of the board before it goes out to the contracting entity, he said. Sen. Diane Bilyeu, D-Pocatello, questioned whether the board even had an attorney review the giant ISAT testing contract. Terrell noted that the board has a deputy attorney general, and the contract also went through the state’s purchasing division. But he promised closer oversight by the board.

As part of that, an existing audit committee of the state board has been newly charged to examine the internal budget.

Laird Stone, who served as president of the board before Terrell took over in late April, said the audit committee hadn’t been asked to look at the board’s internal budget before because “you have to rely on the staff that you have.” The board has been reeling from revelations about its financial problems over the past year and a half, including a new report highlighting how former executive director Karen McGee authorized a $1.4 million payment to the ISAT testing contractor by tapping into the next year’s budget, something state accounting practices forbid.

Currently, the board is keeping vacant its top four agency positions to save money. Other employees are filling in.

Gov. Butch Otter said Monday, “There’s no wiggle room,” and that he expects all state agencies to follow state accounting practices and manage their budgets appropriately.

“I’m confident of one thing – that we figured out what the problem was,” Otter said.

Terrell told lawmakers the board won’t seek funding to reinstate ninth grade ISAT testing in the coming year but will be back next year with a proposal to do so in fiscal year 2009.

Otter said that’s fine with him. “If they can do that within the budget, I think that’s great,” he said.

When the board voted Monday to amend its ISAT contract, the two “no” votes came from state Superintendent of Schools Tom Luna, who said he thought ninth grade ISAT testing was “absolutely essential” but that he understood the budget situation; and board member Rod Lewis, who questioned why the changes also included extending the contract for two more years, through 2012.

Terrell said the extension was in exchange for Data Recognition agreeing to cut its charges by $100,000 a year for three years. He noted that the state still could pull out of the contract if the company doesn’t perform to its satisfaction or if the Legislature doesn’t appropriate the money to continue it.