Former CFO responds to criticism

by Kristen Graham

Published Jan. 15, 2013, 10:21 a.m. ET

I wrote yesterday about former Philadelphia School District CFO Michael Masch's appointment as vice president and CFO of Manhattan College in New York. Masch took issue with the piece, and wrote the following response, which I am posting in its entirety below. It's the first time that Masch has spoken out against criticism of his financial stewardship of the district.

Here's what Masch had to say:

"I was disappointed and surprised to see that, in the Inquirer’s 1/14/13 Philly School Files piece about my new position at Manhattan College, the decision was made to once again repeat some of the false claims that have been made about my record of service to the School District of Philadelphia as its Chief Financial Officer from 2008 to 2011.

I would like to make it clear that at the time I left the School District’s CFO position in January 2012, the District did not face "massive budget problems that, if uncorrected, would have left the district unable to pay its bills within a few months," as your piece alleges.

At the time I left the District CFO position in January 2012,

91% of the District's massive $715 million FY12 budget gap had already been closed through initiatives identified and implemented by the management team I was a part of -- $654 million in gap closing measures had been successfully and fully implemented as of January 2012. (See the School Reform Commission's own January 19, 2012 public presentation on the FY12 SDP budget for verification of this claim.)
Additional initiatives had been identified by my team and were in the process of being implemented sufficient to close most of the remaining gap. (Again, see the SRC 1/19/12 presentation for verification.)
The District had a fully-functioning five year plan model able to identify the available options that could be implemented to keep the School District's budget balanced over a multi-year period after FY12. (This model was used by the Boston Consulting Group team once they arrived at the District, but it was not created by them.)
The District also had a fully-developed emergency deficit financing plan prepared to insure the District would not face a cash flow crisis if other gap closing measures turned out to less than completely successful. Again, this plan was devised by the School District finance team prior to January 2012, before either Tom Knudsen or the BCG team were engaged by the District.