'We need a real plan': $16.6 million withheld as DPI rejects MPS' latest attempt to dig out of hole

MILWAUKEE (CBS 58) -- The ongoing financial scandal at Milwaukee Public Schools is officially costing the district money.

On Thursday, June 6, the state's Department of Public Instruction notified the district it is withholding this month's Special Education aid payment, which totals more than $16.6 million.

It comes after the DPI rejected the Milwaukee Board of School Directors' latest plan to dig out of a hole that's been deepening for months.

Several more dominoes fell Thursday.

The district keeps saying it's finalizing a plan to start reversing the damage done, but on Thursday the DPI rejected the district's latest plan.

As a result, the June Special Education payment was withheld.

Educators say students are caught in the crossfire.

One MPS educator told us, "At some point, our most vulnerable students are going to hurt and get hurt."

She said she is worried for the district's special education students. "That directly starts impacting our summer ESY -Extended School Year- programs. Our kids who will make significant losses."

The teacher worked with special education students for 15 years before she felt she had to leave a program she said was being destroyed. She asked to remain anonymous because she still teaches in the district.

She told us hundreds of students and educators could eventually feel the pinch.

She said it could impact teachers, teaching assistants, speech pathologists, occupational therapists, physical therapists, vision and mobility teachers, child health assistance, and the specialized equipment needed to care for students.

On Thursday evening, we obtained the district's latest financial action plan to correct damage.

It targets key areas like personnel, software, staff training, communication, and timelines and urgency.

But when State Senator John Jagler said on social media the plan showed "no urgency," DPI administrator Tom McCarthy agreed, saying, "We made it clear we need a real plan."

The DPI rejected the draft in a Thursday morning meeting with MPS. They withheld the millions in aid hours later.

The MPS Board said in a statement, "The District is working closely with our auditors and the Department of Public Instruction to complete all documents and reports necessary as required by law."

The Milwaukee teacher's union said, "MPS Special Education families and workers need assurances from the district that they will see no reduction in services as this situation is resolved."

Also Thursday, the DPI confirmed MPS did submit some of the missing budget data this week.

They hope to have a corrective plan in place by the end of the week. The DPI said, "When we have a CAP [Corrective Action Plan] in place, we will also be able to release this withheld special education aid payment."

But when that could happen is still uncertain.

Lawmakers in Madison are also investigating.

State Sen. LaTonya Johnson of Milwaukee told us, "No one was aware of this information prior to the referendum."

Johnson was among the lawmakers to meet with the DPI this week. She said the DPI did not tell the Milwaukee Board how dire the situation was. "The Board wasn't as clearly informed as they should have been, regarding this information."

As the drama plays out at an administrative level, educators tell us they're angry, sad, and hurt.

"We are dejected, and this particular week, embarrassed," said the former special education teacher.

As the Board set a special meeting for June 13 to discuss appointing an interim superintendent, outgoing superintendent Keith Posley's $160,000 severance payment is not sitting well with some.

The teacher told us, "It is a slap in the face and a gut punch and a 'why do we keep doing this every day?'"

The Board said they'll have another update Friday afternoon.