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In 2015, Utah lawmakers set aside $7 million in annual funding to establish a new turnaround program for struggling public schools.
That money is gone, state school board member Joel Wright said Friday, and the program is facing a negative balance as new schools are added to the turnaround list each year.
"We have exceeded that by about $8 million," said Wright, who is vice-chairman of the board's Finance Committee. "Nobody knew what they were doing entirely when they made these contracts with these vendors."
Under the law, sponsored by Senate President Wayne Niederhauser, R-Sandy, the worst-performing 3 percent of Utah schools are identified as failing and required to partner with a private consulting firm to improve performance.
The private vendors receive half of their payment up front, with a contract for the remaining payment if their client schools improve by a full letter grade on the state's school-grading program over a period of three years.
The schools do not receive any funds to implement turnaround strategies, but may be rewarded with additional resources and salary bonuses, "subject to appropriations by the Legislature," if the school's grade improves.
Wright, who told his board colleagues that he wanted to be frank about the situation, said the previous state superintendent had entered into "open-ended" contracts with vendors, using the bulk of the funding set aside for the program's launch year for those initial payments to private consultants.
"I hope all these [new] schools can still turn around with a lot less money," Wright said, "because the first ones took it all, or a lot more of it."
State school board staff had assumed most of the turnaround schools in the program's first grouping would remain in the bottom 3 percent of the state during the second year, according to deputy state Superintendent Rich Nye.
But in fact, all but three of the 26 schools showed performance gains, resulting in a large turnover in the bottom 3 percent of the state and the addition of several new campuses to the program.
The influx of new schools meant little funding was available to contract with private vendors, as contracts for the original group of schools are ongoing.
"As it turns out," Nye said, "we had 17 new schools added to the turnaround program when we were anticipating five."
A subcommittee of the state school board met with educators from turnaround schools in October and school officials raised concern and frustration with the program, which makes demands of school staff while providing resources only to outside, private entities.
And board member Lisa Cummins said Friday the feedback she has heard from school districts involved in the program has been negative.
"It hasn't been very productive with vendors, from what I've been told," she said, "and the money could have been better spent."
Deputy state Superintendent Scott Jones said the program is not technically over-budget, but the state school board is obligated beyond its initial funding if the first batch of turnaround schools is successful at improving performance.
"The budget is intact, but it's obligated," Jones said. "We've obligated close to the full amount."
Twitter: @bjaminwood