Milwaukee public schools face serious fallout from financial mess-up

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Officials at the Wisconsin Department of Public Instruction did not mince words in its letter warning Milwaukee Public Schools Superintendent Keith Posley that millions of dollars in school funds are in jeopardy because of his district’s failure to provide statutorily required financial data.

“Not only are many required reports incredibly late,”  Deputy State Superintendent John Johnson wrote to Posley, in a letter shared with school board members and the public, “MPS has demonstrated a pattern of submitting incomplete data, as well as requesting data changes without having the required documentation for the request.”

DPI warned MPS it might withhold the district’s June special education aid payment, which totaled $15.7 million last year, as well as future state aid payments, because the district still hasn’t filed basic information, including an audit due last December and an annual report due last September.

You can feel the frustration radiating from the letter.

“In an effort to collect the missing financial data from MPS, DPI staff has been meeting with MPS quarterly since April 2023, then monthly as of February 2024, then weekly as of March 15 2024, and now daily as of May 2024.”

It’s an unusual, scathing public scolding of a school district administrator by the state. More unusual still, it comes from an agency that works closely with a pro-public-education Democratic governor and makes a point of championing public schools.

Politically, the financial mismanagement at MPS is a disaster. It comes on the heels of an announcement by the federal government that the district’s Head Start funding will be suspended for 30 days because of deficiencies in staff conduct and supervision of children.

Milwaukee, the birthplace of school vouchers, is a perennial target of school privatizers who have been claiming for decades that public schools are a failure and should be abandoned altogether in favor of privately run academies.

Voters in the district narrowly passed a $252 million public school funding referendum in April which district administrators said was needed to avoid drastic cuts.

It doesn’t sit well with taxpayers to learn that the district can’t seem to manage the most basic tracking of its finances.

Still, “the referendum was the right thing,” says the Wisconsin Public Education Network’s Milwaukee organizer Jenni Hofschulte. “However our reports go to DPI, it doesn’t change the need for that community support.”

Hofschulte is worried that outrage over the district’s administrative failures will overshadow all of the other funding issues Milwaukee schools face.

“However this shakes out, it doesn’t change the fact that MPS has a deficit like everyone else around the state,” she adds.

Still, she acknowledges, the district now faces a serious problem. Not only is a significant reduction in state aid to Milwaukee schools likely because of MPS errors in reporting shared costs, according to DPI, Milwaukee’s failure to file its financial information on time “impacts every school district in the state,” by disrupting the agency’s ability to accurately calculate state aid for all districts.

As the school board meets to discuss the budget and Posley’s contract this week, there’s reason to worry the district could be torn apart. Thursday night’s board meeting was halted when board members called in police to remove people who booed and interrupted Posley and the district’s financial officers.

“I hope cool heads prevail,” says Hofschulte. “It’s unfortunate that it might turn into a call to fracture the district, when that’s probably not the solution to this problem.”

State Sen. Chris Larson (D-Milwaukee) expressed a similar sentiment in a Facebook post:

Meanwhile, the Milwaukee school board issued a statement acknowledging the gravity of the situation: “ We are aware of the matter and are working closely with DPI and multiple stakeholders to resolve the situation as quickly as possible,” board members said. “We are committed to ensuring all requested information is submitted in a timely manner. The Board remains committed to its obligations to our students, their families, and the people of Milwaukee. We take this matter seriously and we are confident that we will be able to course correct promptly.”

“There are pretty profound challenges in the administration of that organization, which I think the board understands,” DPI Executive Director Sachin Chheda said in a phone interview Thursday.

The state is also committed to working with the district, Chheda added. “We want MPS to succeed.”

As for critics who say the MPS’ troubles show the failure of public schools generally, Chheda responded that the tough love DPI is showing the district demonstrates the strength of a publicly accountable system.

“The public school system has a lot of resilience and strength and where something is an outlier, we transparently do something about it,” he said. “We’re demonstrating public accountability in spades here.”

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