February 20, 2001

Mike Shockley has turned over every seat cushion and peered into every cookie jar in the Brandywine School District. There's nothing nickel-and-dime about his hunt for loose change, however. So far it has turned up $2,627,000 and he's still looking.

Personally soft spoken and amiable, Shockley nevertheless has earned a reputation among Brandywine staffers as a no-nonsense taskmaster since he was hired in December, 1999, as chief financial officer and given a mandate to significantly tighten the district's spending and accounting practices. The proverbial big stick he wields is a seeming torrent of directives which take the form of memoranda known, not always affectionately, as 'shockergrams'.

A consummate numbers cruncher, he knows every twist and turn through the maze of government finance and not only can quote by heart chapter and verse of every federal and state spending 

regulation but also actually understands what each of them means. Government budgets in general and school budgets in particular are so much light reading as far as he is concerned.

Few, if any, bureaucrats would be comfortable if their bosses called in an outside expert to scrutinize their domain.  Shockley seemed to revel in dealing with two dozen of them. The just completed six-week study of district finances was conducted by a taskforce which included, among others, several chief executives, a university treasurer, a couple of certified public accountants, an investment manager and even an Internal Revenue Service auditor.

Shockley passed muster. The taskforce subcommittee which reviewed Brandywine's current financial practices and controls said it "is impressed with the ability of the current chief financial officer" and cited him as "an individual who has demonstrated financial 

Mike Shockley

management skills, professionalism and a strong sense of commitment."

The taskforce recommended, in effect, that he be the model for a revised job description that better befits a position which calls for managing more than $100 million worth of annual spending.. It noted that school spending is well past the days when it could be properly handled by former teachers who  were expected to pick up financial management skills on the job.

Shockley told Delaforum that he regards whipping Brandywine's bottom line into shape as a high-stakes proposition. It affects nothing less than the education of 10,000-plus children and, by extension, their futures, he said.

"My goal is to put as much of the tax money into the classroom as I can and make sure that nothing that should go there is wasted instead. Everything we do is for the kids," he said.

"When I took this job I said I wouldn't do it unless I had total control of finances -- every cent and how it's spent," he added.

He takes that literally. Early on, he decreed that nothing gets purchased except with a properly executed and assigned purchase order. And that is just the beginning of the process. Each of those documents is reviewed by his associate Joanne Rispoli and personally countersigned by himself.

"I go through the pile one by one and, if I see something that doesn't look right, I pick up the phone right away and find out about it," he said.

That's all part of what the taskforce recommended be established in the way of "a culture of the highest level of integrity and appropriate fiduciary behavior." Shockley added that principals and other school personnel can reasonably be expected to master and apply at least the rudiments of basic fiscal management.

Except for gasoline purchases for state-owned vehicles, nothing is bought with credit cards and incidental spending on district business requires receipts. "That's down to 50 for the turnpike [toll] if they go to Dover. If they don't turn in a receipt, they don't get reimbursed," he said.

While spending controls are vital, Shockley said the dominant handle for managing district spending is procedural. "You have to know how the system works and apply [that knowledge]. Most people don't understand how education gets paid for," he said.

Having spent 12 years as financial officer with the New Castle County Vocational-Technical School District before coming to Brandywine and 14 years before that in the state finance department, Shockley knows his way around.

In Delaware, about two-thirds of the money spent for education consists of state funds. Expect for a relatively small amount of federal money and private grants that go into the mix, the rest is provided by district taxpayers through an annual levy on the value of their real estate. With figuratively two piles of cash to draw from, it's a matter of simple logic  to spend the 'outside' money first and invest the rest to generate  income.

"Until I came, that wasn't how it was done here," he said. "Now we're spending district money 47% slower, using up our state money and earning interest on the other."

A companion to that is making sure that the district spends all that Dover appropriates for various programs instead of paying for such services from the local purse. Laws governing that spending provide that whatever goes unspent reverts to the state treasury after a stated period. "I discovered that we'd sent back over $500,000 in 'extra time' funds alone. Last June, we didn't send anything back to the state. This year, I'm making sure we spend every cent we're entitled to," Shockley said. June 30 is the end of the fiscal year, when such accountings are made.

While not exactly crediting Shockley with having beaten the system, the financial review taskforce did say he has mastered another formidable opponent. District spending since the last increase in its operating tax ceiling, in 1994, has come in a percentage point below that 16% national inflation rate and most of the favorable comparison dates to the most recent two years. More to the point, the taskforce found that was done even though local revenue grew by only 4% because of relatively little economic growth in Brandywine Hundred and north Wilmington.

The challenge going forward lies in the fact that, despite increased 'productivity', operating deficits in recent years have eaten away at the district's accumulated budget surpluses. The taskforce concluded that, without cutting programs, Brandywine will run out of money to meet payroll and pay its bills soon after June 30, 2002, if it cannot persuade residents to vote themselves a tax increase.

There is at least a 50-50 chance the school board will elect to try that in late May or June, along with seeking authorization to sell bonds to finance renovation of six buildings and major capital improvements at two others. If a tax increase is voted down this spring, that would permit two other tries before fiscal 2002 ends.

Since property taxes aren't collected until Sept. 30 and the district doesn't see the money until October and November, a successful referendum in fiscal 2002 would still produce a crunch. To prevent that, Shockley said he must offset a projected 3% growth in next year's budget by about $750,000.

That translates into some hard decisions in the offing for him and the school board. "It was close this year. If I hadn't recommended that we keep the tax-reduction money, we wouldn't have made it," he said. A state law provides an appropriation which school boards can use either to finance program or reduce taxes. Brandywine last summer opted to take the politically unpopular course and pocket the money.

Shockley said another tough call will be what to do about 50 positions supported entirely by district money. They include reading teachers beyond the state allotment and paraprofessionals.

"About 85% of local funds go to salaries and employment costs. You may be able to cut a little more fat out of the other 15% but if you're going to make a difference it has to be in the 85%. The last thing I want to do is to have to cut services to the kids," he said.

While declining to respond directly, Shockley indicated his personal feeling is that putting am operating tax increase before voters this spring is, at best, an iffy proposition. Although the dust raised by two years of fiscal-related scandal and controversy apparently has settled and the expected hiring of a 'permanent' superintendent in March is expected to produce favorable vibes, measuring proverbial public confidence is not an exact science.

"All I'll say is that we had a long road to come back. I'm not exactly sure how far we've come yet," he said. 

But even a casual observer is almost certain to come away convinced that, whatever is left to travel, Shockley is one who intends to stay the course. 

2001. All rights reserved.

Get more information about this topic

Read previous story: School tax votes pending.

Read the Brandywine Financial Review Taskforce report.





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