DODDS-Pacific squeezed by weak dollar
May 8, 2008
The weak U.S. dollar has put Defense Department schools overseas in a major financial bind, creating a budget shortfall that could require additional help from the Pentagon, DODDS officials said. But the situation appears particularly dire in Europe due to the strong euro.
A spokesman for Department of Defense Dependents Schools-Pacific and Domestic Dependent Elementary and Secondary Schools-Guam said there has been no reduction in services for their 45 schools.
The Department of Defense Education Activity also is no different than other organizations dealing with the weak dollar worldwide, officials added.
“The impact of the dollar dropping against foreign currencies continues to have a cascading effect worldwide, not only within DODEA, but with numerous Fortune 500 corporations,” Chip Steitz, a DODDS-Pacific spokesman on Okinawa, said in an e-mail to Stars and Stripes.
“Therefore, these past two years have been tough in the Pacific, but we consistently strive to place the interests and safety of our students first, both inside and outside the classroom,” he said.
However, DODEA spokesman Frank O’Gara said the financial situation is worse than in past years because the dollar has plummeted, but officials are positive they can overcome the deficit by “realigning funds.”
“We’re confident we’ll get the relief we need,” O’Gara said last week by telephone from Arlington, Va. But the school system, which operates on a $1.5 billion budget worldwide, is unsure where the money is going to come from.
Claudia Shaw, DODEA’s chief financial officer, said it will be at least a month before officials can determine where they’d redirect any funds. If they can’t make up the loss internally, she said the last resort would be to request additional money from the Office of the Secretary of Defense.
The system’s top administrators refused to release the size of the budget shortfall. O’Gara said they will not reveal how big it is because “we don’t want to alarm” parents and teachers, when officials believe the deficit will be patched.
Officials downplayed its significance as something the school system faces every year, but O’Gara acknowledged the predicament is particularly “acute” in Europe because of the strong euro.
Education funding became an issue last month when Army Gen. John Craddock told a House Appropriations subcommittee that soldiers are leaving their spouses and children in the United States because overseas schools do not have enough money and facilities are too old. Craddock, who heads U.S. European Command, did not offer any statistics but said he was “pretty sure, anecdotally, it’s happening.”
DODDS-Pacific declined to say specifically how the weak dollar is affecting the budget, expenses, or housing and cost-of-living allowances for employees living overseas.
“Our team of fiscal program analysts constantly monitors our expenditures and budgetary requirements to ensure our students, teachers, and educational leaders receive the very best in financial support and have facilities that are safe and offer a positive learning environment,” Steitz said.
A year ago, some DODDS-Pacific schools suspended curricular field trips and began prioritizing such outings due to budget cuts. Charlie Toth, DODEA’s assistant associate director for education, said recently there has been no shortchanging of instructional materials, extracurricular activities, course offerings or Advanced Placement classes.
While the sizable shortfall could get worse if the dollar continues to slide, officials hope they can make up the deficit by tightening the budgetary belt and emphasizing frugality.
“We’re working toward some resolution,” O’Gara said.