Whether a $34 million surplus exists in District of Columbia Public Schools Chancellor Michelle Rhee’s 2009 budget remains to be seen.

But amid the “yes-we-have-the-money-no-we don’t” exchanges that have been taking place between Rhee and the city’s chief financial officer, Natwar Gandhi, irate officials at the Washington Teachers Union said during a press conference late last week that until the money matter is resolved, the new teachers contract Rhee recently negotiated with them has been called off.

“We’re here today because we’re very troubled and concerned about the utter confusion that has existed this week regarding the projection of the budgets that led to the dismissal of 266 of our DCPS teachers,” said WTU President George Parker. He added that attorneys for WTU had electronically filed two motions with the court to reopen the record to incorporate new information regarding the DCPS budget.

WTU officials have also asked the presiding judge to delay an April 23 decision on whether the case could go into arbitration. According to Parker, a delayed decision would allow the teachers union an opportunity “to get to the truth” regarding a budget surplus and to litigate on whether the teacher layoffs would hold up.

In a recent letter Gandhi notified Rhee, in no uncertain terms, that the $34 million didn’t exist and that he was “incredulous” to learn she’d announced the surplus to the Council without first consulting him.

“I am at a loss to understand why you did not consult me directly or with any of my DCPS financial staff about the viability of the proposed package prior to your public announcement,” he wrote in the letter obtained from the DCist Web site.

Gandhi acknowledged that while underspending has existed in the DCPS system, overspending in the central office has also been a problem, contributing to non-budgeted costs in excess of $30 million dollars. He said that if any surplus existed, it would be about $29 million less than what Rhee told the Council.

Parker said the contract was never linked to the possibility of DCPS having a surplus.

“It was our understanding that the contract funding would be based on the $64.6 from the private foundations, plus what was being requested from the city in terms of the DCPS budget,” he said.

However, he added, the union would not have proceeded with the contract negotiations if the Reduction in Force (RIF) had not been explained by the supposed deficit. He also said that if Rhee knew as early as February that there was a surplus, she should have informed the union.

“I don’t know why that did not happen. Probably, because we were in court and when we requested a temporary restraining order the judge denied ,” Parker said, adding that that action was likely based on DCPS having presented documentation “that clearly indicated that there was a budget deficit. So, therefore, there was justification for the RIF.”

Although Parker and the City Council believe efforts should be made to reinstate the ousted teachers, Rhee has remained adamant that she will not pursue that course, but instead will use any extra money to fund pay raises.

Noel Cyrus, who was among the terminated educators, said he’s still looking for work and would welcome reinstatement. The Ward 8 resident is a Ballou Senior High School alumnus, who taught there for 16 years. Prior to being fired last October, Cyrus had also coached for 22 years at the Southeast Washington building.

“I poured my heart and soul into my career,” he said. “I listened to President Obama say he wanted teachers who were role models and who go beyond being in the classroom. Well, I’m one of those people he’s been talking about.”

However, Cyrus said the public has failed to hold Rhee and Mayor Adrian Fenty – to whom she reports – accountable for all that’s transpired. “They haven’t held their feet to the heat like they do everybody else,” he said. “Fenty and Rhee are running the school system as if their parents willed it them.”

Randi Weingarten, president of the American Federation of Teachers, said the situation has evolved so much into a debacle, that it has taken on a “keystone cops nature.”

Referring to the wrangling between Rhee and Gandhi she said their antics — which have demonstrated incompetence and lack of clarity — would be funny if not so tragic.

“This not a shining moment for the D.C. government or the D.C. public schools,” Weingarten said.? “While the unfolding story has been covered as an accounting exercise, it’s much more than that. It’s about the lives of hardworking teachers who lost their jobs and the loss of trust in public officials that don’t seem to want to play straight with them.”