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Begrudgingly, principals prepare to spend fast or lose savings

Principals who want the full benefit of the funds they’ve squirreled away have just weeks to spend it all.

The Department of Education’s announcement last month that it would take back half of any funds principals choose to save for next year gave principals the incentive to spend down their last cent. The city has extended until March 18 the deadline for principals to choose between spending their entire budget this spring or saving money for next year — and losing half of it.

But while principals technically have until the end of the school year to spend any funds they don’t roll over, DOE spokeswoman Barbara Morgan confirmed today, their spending sprees actually have to take place in the next eight weeks. That’s because the city’s school budgeting system requires principals to lock in their spending plans by the end of April.

“The department has all but ensured that a hasty spending spree on non-essential items will in two months decimate the reserves principals have built over years, leaving everyone (from the the most prudent to the most reckless) equally unable to cope with even larger budget cuts to come,” the principal of a small high school told me today.

The principal’s comments are worth reading in full. Here they are:

I am not sure the public fully appreciates the implications of the recently announced change to the “Deferred Program Planning Initiative.” Deadlines on purchasing computers and furniture are in three weeks and deadlines on most other purchases are in mid-April. Given the late announcement of this shift in policy, principals have no choice but to give back 50 percent (something I can’t imagine any significant number doing) or spend the bulk of it on equipment and supplies (even facilities upgrades will be made impossible due to the timing).

Last year, principals saved $80 million. This year, I’m sure it would have been substantially more. Thus the department has all but ensured that a hasty spending spree on non-essential items will in two months decimate the reserves principals have built over years, leaving everyone (from the the most prudent to the most reckless) equally unable to cope with even larger budget cuts to come.

The likely result is that approximately $80-100 million that could have been used by schools to preserve teaching positions, extracurricular activities, and supplementary academic programs next year will instead be spent on laptop carts and copy paper. Even more troubling is that this policy removes all incentive for principals to be fiscally responsible and to engage in strategic and long term planning.

Our own school had painstakingly built up reserves equivalent to 7 percent of our annual operating budget over a three-year period. We will now spend it in four weeks.

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