The state is still waiting for MPS financial reports due in September

Milwaukee Public Schools and state education officials say the district still has not submitted fiscal year 2023 financial data to the state.

After financial mismanagement was uncovered in the spring, MPS and the Department of Public Instruction drafted a corrective action plan that gave the school district until the end of September to submit missing financial reports.

These reports are now expected by Thanksgiving.

State Superintendent Jill Underly and Interim MPS Superintendent Eduardo Galvan said the process is taking longer than expected because the financial problems are more severe than initially thought.

“Our goal is to not only file the 2023 financial reports, such as the audited financial statements, but also to work with them to improve internal practices and procedures,” Underly said during a press conference on Monday. “We are also actively working on planning the filing of the district’s reports for the 2024 fiscal year.”

Underly said the corrective action plan is not about setting deadlines, but rather about providing a path forward for what needs to be done. ‘

“And the fact is that while we have insisted that the district provide a path forward, what we have learned along the way about the depth of the problem means it has taken longer than we had hoped,” said Underly.

The 29-page corrective action plan exposed an inexperienced and understaffed finance office that used an outdated accounting system to manage the state’s largest school district.

According to the report, twelve vacant positions in the finance department had to be filled and the MPS software system BusinessPlus had to be updated by the end of September.

The current system couldn’t convert financial data into DPI’s WISEdata system, essentially meaning it was useless.

On Monday, the district did not respond to whether that system had been updated.

DPI Assistant State Superintendent Tricia Collins said most of the vacancies in the MPS finance department have been filled, but the district still has not hired an auditor.

After the financial scandal was uncovered, Superintendent Keith Posely and CFO Martha Kreitzman resigned and Gov. Tony Evers called for operational and teaching audits of the district.

Legislative Republicans have called for an audit of DPI. The department knew about the district’s financial problems before MPS asked voters to approve a $250 million referendum.

Underly was asked Monday whether DPI should look into county finances sooner to avoid future problems like this.

“We’re always looking for ways to re-evaluate our processes, and I think we can certainly look at this as a possibility,” she said.

The mismanagement of MPS finances was costly to the district. DPI withdrew $42.6 million in state aid from its payment to the district last month due to the district’s reporting errors in the 2022-23 school year.

Galvan, who has served as interim superintendent for about three months, said he recognizes the public is frustrated with the situation, but significant progress has been made.

“My goal now is to make sure something like this never happens again,” Galvan said. “I am confident we have the right people in place to move the district forward.”