'A parade of bad news': MPS risks having aid withheld after missing latest reporting deadline
MILWAUKEE (CBS 58) -- The clock is once again ticking for Milwaukee Public Schools (MPS) after the district found itself missing another state-imposed financial reporting deadline.
The Wisconsin Department of Public Instruction (DPI) sent MPS a letter on May 5 warning the district it needed to submit its 2024 fiscal year aid certification and annual report by May 16. The letter also noted MPS needed to get audited financial data to the state by May 30.
DPI officials warned missing either deadline would lead to the state issuing "a notice to withhold aid." The state is growing impatient because it needs to give every Wisconsin school district an estimate for how much state aid it will receive next year, and in order to do that, the DPI needs to see the books of the state's largest district.
"It’s a state aid pie, and you have to figure out how to divvy it up," Marquette University Research Fellow Alan Borsuk said. "If you can’t figure out who gets the biggest piece of the pie and how big that piece is, which is to say Milwaukee Public Schools, you’ve got a problem divvying it up for everybody else."
MPS missed the May 16 deadline last Friday. DPI spokesperson Chris Bucher told CBS 58 Monday the state has not yet given MPS a notice of intent to withhold aid.
"We are still working through details on what that looks like and will provide more information when it becomes available," Bucher told CBS 58 in an email.
MPS' financial crisis last spring led to the ouster of former Superintendent Keith Posley. The state clawed back more than $42 million to make up for overpayments MPS had previously received because of inaccurate financial data.
Before that, however, the DPI withheld MPS' June 2024 special education payment of $16.6 million because of delayed financial reporting.
"It just is a parade of bad news," Borsuk said. "The finance stuff is at the front of the parade. Well, maybe the lead paint stuff is at the front of the parade. No, maybe the student performances are at the front of the parade. The competition to be at the front of the bad news parade is really sharp."
Last month, MPS Superintendent Brenda Cassellius said she was attending meetings twice a week with DPI staff and the district's finance office.
"We’re absolutely working on a deadline," Cassellius told CBS 58 in the April 9 interview. "And we are working diligently to meet those deadlines, and we all are -I wouldn’t say worried, but we are cautiously optimistic that we will meet our deadlines."
While MPS has missed the May 16 deadline, a district spokesperson said the district was "working with urgency" to meet next Friday's May 30 deadline for submitting audited finances.
"As we address past gaps in our financial reporting systems, this effort demands an all-hands-on-deck approach," the MPS statement said. "Which our finance team is providing.”
The district has a lot of new hands in its finance office, but its progress has also hit some public snags. In February, CBS 58 first reported MPS' new comptroller, Begmurad Nepesov, left the district after only two weeks on the job.
While Borsuk observed the May 5 letter from the DPI had a softer tone than the public scolding the state gave MPS last May, he said the most important relationships MPS might be harming with another round of missed deadlines might be the ones with Milwaukee parents deciding where to enroll their kids and with lawmakers crafting the next two-year state budget.
"They’re not doing a good job winning over the audience," he said.