The State Assumes Control Over Muncie Schools

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Muncie, Indiana Blog – Muncie Schools have officially been taken over by the state effective in two weeks. As most of you living in Delaware County have heard, “The Distressed Unit Appeal Board (“DUAB”) designated Muncie Community Schools as a distressed political subdivision pursuant to Indiana Code 6-1.1-20.3-7.1. This means that effective January 1st, 2018, Administrative Assistance will assume the role of superintendent and DUAB will function as the local school board.

According to DUAB’s press release:

Administrator Assistance (AA) has served as the emergency manager for Muncie Community Schools since June 2017, as the school corporation was designated as a fiscally-impaired school corporation.  The fiscally-impaired school corporation designation ends as of December 31, 2017. DUAB anticipates completing a selection process this spring to identify potential candidates for the longer-term emergency manager role.

While DUAB acknowledged that Muncie Community Schools has made progress in addressing its operational financial deficits, DUAB indicated that additional financial challenges remain which threaten the school corporation’s ability to achieve financial stability.

Mainly the $10 million bond in 2014-15 proceeds misused for operating deficits must be repaid to bondholders. I am sure there are other shortcomings we’ve not been privy too, like vendor payments, etc. which also must be brought current.

What still puzzles me is no determination has been made on who allowed bond proceeds meant for capital improvements to be used for general operating expenses. Citizens want to know how it happened. When I specifically asked AA about the misuse of funds, I was told, “We weren’t hired to assess blame. As you know, some poor decisions are just that. That doesn’t make them illegal.”

The problem with that explanation is it doesn’t hold anybody accountable. If the CFO and superintendent allowed this to happen without notifying the local school board members, then we need to know if our elected members were kept in the dark. This would be a criminal act. If school board members did know but failed to report this to the public, we need to understand who breached their fiduciary responsibility and why. Was it just the administrators, or did others know?

The incorrect answer is we don’t know, primarily when you’re selling off public assets to rectify the situation.

The state now entirely operates Muncie Community School district. The school board and appointed managers sold off valuable pieces of property (Anthony and Northside Middle School) to Ball State for a combined $1.4 million which is nothing short of theft. NMS isn’t even a closed school building. It’s also a conflict of interest considering the state also operates Ball State University. This might be a civil lawsuit in the making.

Ball State exercised their state-granted powers to buy Northside Middle School for $1.2 million. The property is 26+ acres. Ball State paid $1.0 million for less than a city block to construct their new health sciences building. This gives vulture capitalists a bad name. But if you listen to the state paid emergency managers, we should be grateful:

Steve Edwards, Emergency Manager said, “It is also appropriate to thank Ball State University for stepping forward to help MCS with the purchase of Northside Middle School and their willingness to assist the school district with a lease if necessary. This support of the school system and the community is commendable.”

I’m not particularly thankful, nor should local taxpayers whose tax dollars acquired the properties along Bethel Avenue. Someone misused $10 million, and local taxpayers and our children are paying the price. We need a remedy which may include holding the guilty party/parties accountable.

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