"One of the biggest school screw ups we've ever had."
Superintendent Jeremy Calles, previously the subject of disciplinary issues reported by State 48 News, is a paid consultant to Isaac School District facing a multimillion-dollar bailout or closure.
State and county officials convened an emergency meeting Tuesday, revealing the Isaac School District in Phoenix, Arizona, is drowning in $12.3 million of excess spending, a financial disaster demanding immediate action.
“If something doesn’t happen in the next two weeks, they (Isaac School District) will not make payroll. Teachers will be looking for jobs elsewhere or not showing up. Five-thousand families for a place to place their children.”
Tom Horne | Superintendent of Public Instruction | Arizona State Board of Education
Faced with limited options, the Arizona State Board of Education agreed the best option is to place the Isaac School District into receivership. The motion made by Tom Horne, Arizona Superintendent of Public Instruction, followed a fiery statement from the Maricopa County Treasurer who accused the Preschool-8th grade district of outright lying about its finances.
“I am very, very concerned that something much more heinous has been going on here and this is not just a simple mistake.”
John Allen | Treasurer | Maricopa County Treasurer
The meeting sending shockwaves across the state featured a familiar face to State 48 News—Jeremy Calles. Joining the call as a consultant for the Isaac School District, he presented a budget plan to tackle its financial meltdown.
Consultant, you ask?
Tolleson Union High School District Superintendent, Calles is embroiled in allegations of an inappropriate relationship with then-school board president Dr. Elda Luna Nájera - who also happens to be a state lawmaker in the Arizona House of Representatives.
State 48 News exclusively interviewed Jeremy Calles in December 2024, in the moments before the Tolleson Union High School District governing board voted to place him on paid leave - working from home - following review of a conduct report.
Read about it here.
During Tuesday’s special meeting between with the Arizona Department of Education (ADE), the Arizona Auditor General, and Maricopa County Treasurer, Calles tells the panel he runs two consulting companies assisting 70 school districts across Arizona.
At least one board member for (ADE) seemed caught off guard by news of Calles’ role as a consultant, sparking sharp questions about how he plans to juggle two jobs at once. ADE board member Jenny Clark cut straight to the point, questioning his employment status and capacity to spearhead a bailout for another district.
Calles’ consulting business is no secret, with State 48 News finding it as one of the key issues in the leaked conduct report leading to his suspension last December. Yet, shockingly, some in the education sphere remain unaware.
Clark asks Calles, “My understanding is that you were on paid leave from your District as a superintendent. Is that not true anymore?”
“Yeah. So. First. Not sure how that pertains to this particular conversation. But, yes, I am back in the office. My EEOC complaint is still going forward with the sexual harassment. But again, not sure how that pertains to what we’re discussing here about Isaac Elementary School District.”
Jeremy Calles | Consultant for Isaac School District | Superintendent Tolleson Union High School District
Clark confirms Calles is a full-time superintendent while simultaneously working with this district in financial turmoil.
“Okay, and then you’re also going to operate this company that’s supposed to help Isaac monitor the fiscal crisis team while also in your full-time superintendent role?” Clark asks pointedly.
Calles: “And I’ve been doing that for six years. Yes, ma’am.”
Calles juggles his taxpayer-funded role as a school administrator with his private consulting business by subcontracting the work to others, he explains.
LAST DAY. LAST MINUTE.
The financial collapse of the Isaac School District brings another familiar face into the spotlight—one already featured in State 48 News’ recent reporting.
On his last day in office, Maricopa County School Superintendent Steve Watson made a blunt admission to ADE, confirming ISD’s massive over-expenditure and calling for a 15-107 hearing, setting the stage for potential state receivership.
But Watson’s last day in office wasn’t just about fiscal disasters. State 48 News uncovered his controversial, last-minute school board appointments, raising eyebrows and serious questions about his timing and motives as he exited the role.
As early as 2022, then-Maricopa County Superintendent Steve Watson was made aware of Isaac School District's money troubles by Maricopa County Treasurer John Allen whose office flagged the finances. “Hey, they’re looking upside down to us and they’re not getting their grants. They have outstanding grant requests. And they don’t seem to be getting reimbursed,” Allen recalls.
Fast forward to December 30, 2024, when Isaac School District reportedly submitted a revised Annual Financial Report (AFR) to ADE. The revised AFR indicated nearly $3 million in over-expenditures within the Maintenance and Operations (M&O) fund and an additional $9.3 million in over-expenditures in unrestricted capital, totaling approximately $12.3 million in reported excess expenditures.
The next day, December 31st, which happened to be Watson’s last day, he wrote the letter calling for this week’s emergency meeting and eventual vote on receivership. Watson was not on Tuesday’s call. New Maricopa County School Superintendent cannot be seen in the call, but State 48 News is told she was present and sitting next to the County’s Assistant Superintendent Heather Mock.
Maricopa County Treasurer John Allen expresses great confusion when describing how Isaac School District apparently shifted $14M in funds in just two months time. John Allen says, “But if you look at their submissions on their journal entries, they lied to us. All we can say what they were doing was lying.”
Allen says his department has no more money, and can give no more money to Isaac School District. Saying his hands are tied, Allen warns there’s no more money for paychecks due in two weeks.
HOW DID THIS HAPPEN?
Dr. Mario Ventura, Superintendent of the Isaac School District in Phoenix, Arizona, says the District has been on the Top 10 list for financial risk for a while. He places blame on a frozen tax rate not allowing them to recoup the cash to operate.
Prior to the pandemic, the Isaac SD oversaw $8,308,232.97 spanning 9 grants. During the pandemic, the number of grants the District managed jumped to 19 totaling $64M. “That was a major stress on the department on Business Services. You’re trying to spend this money in the timelines and just keeping up with all of that was a challenge,” Dr. Ventura tells the panel.
Maricopa County Treasurer John Allen doesn’t buy it.
“I don’t believe a single word that Superintendent Ventura is saying.”
He goes on to say, “I’m a bank. This bank will not become a slush fund for a District that is so outta whack that I don’t see any way out,” says Allen, Maricopa County Treasurer.
Arizona Superintendent of Public Instruction Tom Horne revealed his failed attempt to convince County Treasurer John Allen to advance funds to the struggling district. “He made it clear he would not do that,” Horne stated. Instead, Allen proposed taking the issue to the Board of Supervisors to explore alternative funding solutions.
Under Arizona law, when a school district like Isaac is placed under receivership due to insolvency or gross financial mismanagement, the State Board of Education appoints a receiver to assume control over the district's financial operations. The receiver has broad authority to override decisions of the district's governing board and superintendent, supervise staff activities, and implement a financial improvement plan aimed at restoring fiscal solvency. This process continues until the district meets specific financial stability criteria, at which point control is returned to the local governing board.
State 48 News has reached out to Superintendent/Consultant Calles for comment. We have not heard back.
THE MORE YOU KNOW
We have serious questions about finances and proficiency scores in the Isaac School District.
The Isaac Elementary School District is home to 13 schools. Enrollment has declined, with 1,972 fewer students in 2024 compared to 2019.
Even though proficiency in ELA and math is below 20%, the District earned a “B” rating from the Arizona Department of Education.
Superintendent Tom Horne expressed concern in Tuesday’s meeting that if the money runs out and the schools close, it would be difficult for the families to find alternatives as many are low income and would have difficulty placing children elsewhere.