Michigan officials have approved the Detroit Public Schools deficit reduction plan and its request for early release of April and May state school aid payments. Daniel Hanrahan, director of the State's Office of State Aid and School Finance, informed Detroit's Emergency Financial Manager Robert Bobb of the state's willingness to release state aid payments for April and May. The April payment, totaling $46 million, and the May payment, totaling about $67.5 million, will ensure the cash-strapped school system is able to make payroll.
EARLIER....From The Detroit Free Press: Surprise, disgust and uncomfortable confrontation marked a meeting in which the state-appointed emergency financial manager for Detroit Public Schools discussed a $305.8-million deficit and stood up to board members who want more power than the law allows under a state takeover. Bobb outlined his plan to close up to 50 schools and lay off thousands of workers over the next two years. He plans to present the school closure plan next week. The district has shuttered more than 65 schools since 2005, and now has nearly 200 schools open with about 95,000 students. Demographers project the school system's enrollment could fall to 65,000 students within five years.
From The Detroit Free Press: The Detroit school district's financial manager says the system's historic deficit has its roots in a startling lack of oversight and record keeping. Robert Bobb says the blame has to be laid at the feet of management. His findings confirm some of those laid out in last year's audit reports from the Council of the Great City Schools and prior years' audit reports. Bobb's staff has found $15.2 million in unrecorded invoices and contracts. He has projected a $305 million deficit in a report filed with the Michigan Department of Education. That includes a $25 million cushion because he expects to uncover more costs that were not budgeted.
From The Detroit Free Press: The Detroit Public Schools has asked to borrow $168 million from the state in order to pay employees, vendors and the state pension fund through the summer, the district says. The borrowing is intended to help the district's cash-flow problem and does not begin to address the estimated $200-million deficit.
From The Detroit News: Detroit Public Schools' new emergency financial manager has appointed a three-person team to stabilize the district's troubled finances and root out wrongdoing. Robert Bobb announced the one-year appointments of Ricardo A. Kisner, a certified public accountant, as chief financial officer; John E. Bell Jr., a former FBI Special Agent, as inspector general; and Odell W. Bailey, a former interim auditor general for Wayne County government, as auditor general. Bobb said he chose Bell as inspector general because of his law enforcement experience. Bobb issued a plea to employees and citizens to report suspected waste or mismanagement to a new hotline and e-mail address.
The state-appointed emergency financial manager for Detroit Public Schools has issued another directive aimed at saving money for the district, which has an estimated $200 million deficit. Robert Bobb ordered the termination of a $650,000 contract with Pierce, Monroe & Associates. The company was hired by the school board to set up an internal audit department. Read The Detroit Free Press article.
Detroit Public Schools' new financial manager plans to employ an inspector general position that will manage the forensic audits in the district, reversing a decision by the school board. Robert Bobb, in his fourth day on the job, also told staff that he plans to establish a telephone hotline and create other communications mechanisms to allow staff to give him confidential input. Before Bobb was brought in, the school board had eliminated an inspector general position, opting instead to create an internal audit department.Read The Detroit News article.The Detroit school district's new emergency fiscal manager says the system's financial deficit is estimated at more than $150 million, higher than thought. Robert Bobb says he will present a detailed plan within 30 days to address immediate problems. His first task is to determine the actual deficit.The district's overdue payments to vendors also are greater than previously reported. Bobb says the district reported $46 million in past due payments for bills of more than $10,000. When all bills are tallied, the amount balloons to $72 million.
Read The Detroit News article.
