MPS missed updated deadlines for financial reporting. State officials say it's not a problem

 

MILWAUKEE (CBS 58) -- Wisconsin's top education official downplayed Milwaukee Public Schools (MPS) missing deadlines for reporting financial data that was already several months overdue during a call with reporters Monday afternoon.

State Superintendent Jill Underly said she was encouraged by progress MPS has made toward turning over audited reports outlining the district's 2023 financial data.

Under a corrective action plan MPS agreed to with the Department of Public Instruction, MPS missed the first updated deadline last month. Underly told reporters she didn't see the most recent delay as a failure on MPS' part because over the past several months, the district's new leadership has realized MPS' financial challenges were steeper than previously thought.

"The corrective action plan wasn't ever about instituting new deadlines," Underly said. "It was about getting the required work done, and the fact is that while we insisted the district lay out a path, what we have been learning about the depth of the problem along this journey means it has taken longer than we've hoped."

MPS is still working with an outside auditor to have its financial data reviewed and submitted to the state. Interim Superintendent Eduardo Galvan praised the district's new chief financial officer, Aycha Sawa, and said the district's financial reporting will continue to improve once MPS fills its vacant comptroller position.

DPI officials said they were also encouraged by what they've seen from Sawa during ongoing daily meetings with MPS leadership.

Sawa, who came to the district after previously serving as the City of Milwaukee's comptroller, told reporters the district's problems included use of financial reporting software that's not compatible with the state's system. While that issue was previously shared with the public, Sawa said widespread vacancies in the finance office also meant there also wasn't much of a system in place for tracking the district's financial reporting.

"While completing our recent work, we found that certain processes have deteriorated over time due to staffing and turnover issues that led to these reporting issues in the first place," Sawa said.

Galvan said the district's goal was to have outside auditors complete a review of the district's accounting and provide the audited financial reports by Thanksgiving. He said one challenge was the new finance staff juggling multiple tasks while still shorthanded, including a comptroller position that remains vacant.

"Part of our work now, that Aycha and the team are doing, is not only making sure that our current data is correct," he said. "But building in processes and templates so that, moving forward, we don't continue to do the things that were wrong."

State officials confirmed Monday DPI withheld $42.6 million from MPS in its September aid payment to make up for a past overpayment MPS received. The district had been overpaid by that amount because it previously gave the state inaccurate financial data.

Galvan was asked how the district would make up for that adjustment. He said the lost dollars would not affect staffing, but he also declined to offer any specifics about what MPS will do until after the DPI releases updated 2024-25 state aid amounts Tuesday for all Wisconsin school districts.

"We will look at levers in terms of moving or making some changes in fund balances to cover any shortfall, so that we can continue to offer our students the services they need and deserve and not impacting staffing," Galvan said. "So, we will have more details on that for our community and for DPI and all once we get that final number."