The district's finances are a huge unsolved problem. A report this month from state Budget Secretary Michael Masch blamed poor financial management and lack of oversight for the deficit. Each year, the district overspent, even though it was supposed to right itself financially after a 2001 state takeover pumped in hundreds of millions of dollars and allowed the borrowing of $300 million more.

Vallas said the overspending had been no secret, and he doesn't apologize for it; it yielded substantial results, he said. He knew the district was running short on funding, and the commission should have known, too, because it received private briefings from the finance team, he said.

"Let's not pretend we didn't know," he said.

The surprise, he said, came in the size of the deficit and its early arrival.

Vallas said he had asked Nevels, the commission chairman, whether he could change the financial team after the deficit emerged, but had been rebuffed. Nevels, he said, had selected the chief financial officer, Folasade Olanipekun-Lewis, who resigned a few weeks ago.

In retrospect, Vallas said, he should have insisted that he be able to appoint his own finance team throughout his tenure.

"I was too passive on those issues," he said.

Nevels vigorously disputed Vallas' account. He said the commission had received no private briefings from the finance team, and that he did not recall Vallas' asking him whether he could change the team. Olanipekun-Lewis, he contended, was Vallas' hire.

"The finance team was Paul's team," Nevels said.

And he said he had never told Vallas he wanted him out.

"Paul Vallas is a great change agent," Nevels said. "We were relying on him to move this district forward in an unprecedented way. . . . For that we are tremendously appreciative."

But Nevels said he was disappointed in the financial outcome, given Vallas' previous stint as Chicago's budget director.

"We thought we were getting a budget expert," Nevels said.

Confronted with Nevels' denial that he wanted him out, Vallas swore to its veracity. "I'll kiss my crucifix," he said, grabbing it from his neck.

The real culprit for the financial mess is inadequate city and state funding, Vallas said.

"This district is underfunded by $1,200 more per pupil," or about $240 million, he said. "It's time for people to fund their schools."

Vallas should have said that a lot sooner, and not doing so was his biggest mistake, said Shelly Yanoff, executive director of Philadelphia Citizens for Children and Youth, a nonprofit that advocates more school funding.

"At some point, we needed to say . . . we can't produce the changes we want fast enough and solidly enough unless we have more money," Yanoff said.

Rendell defended the state, saying his administration has increased education funding substantially. To expect more was "unrealistic," he said.