12News I-Team Exclusive: Former Isaac Schools CFO on district’s financial crisis

PHOENIX — It’s been a rough few months for the Isaac Elementary School District in West Phoenix. 

A tally by the Maricopa County Treasurer’s Office found the district’s budget was in the red by more than $28 million.  In January, the district went into receivership, where a third party took control of the district’s finances.  But the former CFO says there’s more to this story.

“Everything was spent exactly the way it was supposed to be spent,” said Lynn Lang. “What really it comes down to is, you know, the cash wasn’t there to back it up.”

Lang was the Chief Financial Officer at Isaac Elementary School District until January 2025, when she said she was asked to resign amid the district’s financial fallout.  In an exclusive interview with 12News, she’s defending the district. 

“People are saying, ‘Oh, there needs to be an investigation. This is fraud. This is criminal.’ How do you respond to that?” asked I-Team reporter Erica Stapleton. 

“There’s absolutely nothing we did that was remotely criminal,” Lang asserted. 

Lang explained that the district has a budget limit set by state law each year, authorizing what they’re able to spend.  She said they never went over that limit until 2024 when a paperwork error cost them nearly $9 million dollars in reimbursements for federal COVID money — money they already spent.

“And we never received cash to cover those expenditures,” she said.

The other problem, she said, stems from taxes.

“The state froze our property taxes too low,” Lang explained. “And so we couldn’t collect enough cash to cover our entire budget.”

“Then why not lower the limit if there wasn’t enough cash to meet the needs?” asked Stapleton.

“Why would we lower our budget limit to meet the cash and take those funds away from students who probably need it the most?” Lang said. “Why would we lower our budget limit and spend less on each one of our students than we’re authorized to spend when we have no control over the cash part?”

By law, the state has a formula that dictates what each district is allowed to spend each year.  But Lang said local taxes have not kept up with the money they need, leaving Isaac operating at a constant cash deficit for years.  

For the past five years, the state Auditor General’s Office flagged Isaac as one of the highest-risk districts financially.  The years-long cash deficit and other issues like a decline in enrollment, challenges with grants, and paperwork errors, were all discussed in a special State Board of Education meeting in January.

The meeting was called after the Maricopa County School Superintendent’s Office referred Isaac to the State Board of Education for overspending its budget.  

“They worked with us,” Lang said. “They knew that deficit was there.”

She said the district was working to get the deficit down, describing it like the end of a storm.

“And when the end of the storm was coming, we got hit with a hurricane,” she said.  “It blew up at us…The failure to collect the funds for the grant…really created this. There was no reason why it needed to become the catastrophic event that everybody made it.”

The Maricopa County Treasurer’s Office says it’s more than just the grant money.  Treasurer John Allen was also in that same January meeting.  He told the Board he started flagging Isaac as early as fiscal year 2022.

“They’re looking upside down to us,” he said in the meeting.  “This never got any better.”

At the time of the meeting, the district was in the hole at least $12 million, but leaders expected that number to go up after a review.

Over email, Allen’s Office told 12News that as of January 24, 2025, Isaac Elementary School District had $16.6 million in fund deficits, $3.9 million in registered warrants, and $8.0 million in tax anticipation notes, which are due in July 2025.  All of that added up to the $28 million.

“They’re lying to us,” Allen told the Board of Education, adding that his Office could no longer send the district money.

By the end of the January special meeting, the State Board of Education voted unanimously to put the Isaac Elementary School District in receivership, where a state-contracted third party would take over financial decision-making.

The news sent the community into turmoil.  

School superintendent Dr. Mario Ventura ultimately resigned.  Teachers were at risk of not getting paid.  There was uncertainty about whether schools could stay open.

“How do you balance that by saying that, you know, it wasn’t as big of a deal as maybe it’s being made out to be when those are very real things that were happening as a result of this?” asked Stapleton.

“We didn’t have the opportunity to change the narrative at all,” Lang said. “But all of a sudden when you dig another $10 million hole, you know, I can understand it. It probably wasn’t manageable at that point. But that doesn’t mean it couldn’t have been fixed without it creating this crisis.”

“To the families, the staff, and the people who make up the Isaac School District community who have been through this turmoil,” said Stapleton.  “What do you say to them?”

“I’m sorry,” Lang said.” I’m sorry I can’t be there to help clean it up.”

She continued to note the challenges teachers face and she acknowledged the district’s school board.

“To the Board – I never lied to you,” Lang said. “I never misrepresented finances.”

Isaac was largely bailed out by the Tolleson Union High School District, which bought one of Isaac’s schools for $25 million.  The districts worked out a deal where Isaac would pay Tolleson back with interest over the next several years.

The I-Team reached out to the attorney for the receiver with Lang’s claims.  

Attorney Ryan Anderson said he couldn’t answer those questions until the investigation is completed but noted over email that  the investigation report would include “a financial improvement plan and budget that details how the school district will eliminate any continued gross financial mismanagement and achieve financial solvency.” 

“Who do you think is responsible for what happened?” asked Stapleton.

“For the over expenditure in ‘24? Absolutely, the district,” Lang said. “I don’t mind taking responsibility when there are mistakes made. I do mind the fact that they don’t let me try to correct those mistakes.”

In the latest school board meeting for the Isaac district on March 6, 2025,  the interim superintendent said the district has been able to reduce costs through the end of the year by about $2 million dollars.  

Those savings, according to the interim superintendent, came from eliminating 85 staff positions, outsourcing services, and reducing programs.  None of the eliminated positions included teachers.

The attorney for the receiver said the receiver has until mid-May to issue his investigation report to the State Board of Education.

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