State officials will withhold another payment to Milwaukee Public Schools because the district missed an extended deadline for submitting financial reports May 30, Wisconsin Department of Public Instruction Deputy State Superintendent Tom McCarthy said June 3.
It’s not yet clear how much money will be withheld or what the district will have to do to recoup those funds. That information will be shared in a letter in the coming days, McCarthy said.
A spokesman for MPS, Stephen Davis, said the district expects to submit financial information “in the coming days” and has been assured state aid can be released quickly after the information is reviewed.
“We expect any withholding of funds to be temporary and will not interrupt services to students in any way,” Davis said in a statement.
The news comes the day after MPS Superintendent Brenda Cassellius published her $1.549 billion budget plan for the next school year, which includes a restructuring of the district’s central office and recruitment of new leadership, citing issues in the finance office among problematic operations that need stronger oversight.
State officials need MPS’ financial reports, including audited financial statements from the 2023-24 school year, to calculate by July 1 how much state aid they should send to MPS and every other Wisconsin school district. All other districts have submitted the needed information, DPI Spokesman Chris Bucher said previously.
MPS staff are working with accounting systems that had strayed from state standards over several years under previous administrators, who’ve since resigned.
Cassellius, who started the superintendent job in March, told the Milwaukee Journal Sentinel she had recently been focused on overseeing the cleanup of widespread lead paint hazards but has now taken over management of the late financial reports. She moved finance staff into her office suite to oversee their work completing the reports for DPI.
Cassellius said she’s been in contact with state officials daily and expects MPS will be able to submit the information DPI needs in time to calculate state aid payments. DPI staff have been helping MPS on site.
“Even though we might be a few days late, we will have delivered on that within a timeframe that allows the state to do their calculations,” Cassellius said. “They have just been incredible collaborative partners — patient, because they know what we’re dealing with here and the enormity of what we’re cleaning up.”
McCarthy praised the district’s progress under Cassellius’ leadership.
“Withholding funding is a last resort and comes after countless hours spent supporting MPS,” McCarthy said in a statement. “We’ve seen real progress in recent months under the leadership of Dr. Brenda Cassellius, and we recognize and appreciate the hard work that has gone into those efforts.”
Second consecutive year MPS has missed deadlines
It’s the second year in a row MPS has missed state reporting deadlines. Last year, public outrage over the late reports led to the resignations of top officials, a recall attempt of school board members, and a state-imposed corrective action plan to rehabilitate the district’s finance office.
When MPS missed the deadlines last year, state officials withheld a $17 million special education payment. They are still withholding that payment, seeking more progress from MPS on its corrective action plan.
In the last year, MPS has missed many of the dates it outlined in its corrective action plan.
The district’s new chief financial officer, former Milwaukee Comptroller Aycha Sawa, has described a “steep learning curve,” finding that processes had long deteriorated in the finance office because of vacancies and turnover. The district’s accounting system wasn’t aligned with the state’s system, and under-trained staff were using clumsy spreadsheets to complete reports for the state, making errors along the way.
Sawa has faced the dual challenge of piecing together accurate information from the district’s previous poor accounting system to complete overdue reports, while charting a new system to prevent the same issues in the future.
Cassellius said in an interview May 23 that her goal is for the district’s 2025-26 accounting to be done in a system that’s fully compliant with the state’s uniform financial accounting requirements.
MPS board enlists experts to advise them on future financial audits and other audits
Milwaukee School Board members voted May 29 to approve members of a new external audit committee, which will advise it on how to respond to audit results, including financial audits that assess the district’s accounting practices.
The members were listed as:
- Milwaukee School Board President Missy Zombor, nominated by the School Board
- Nik Kovac, budget and management director for the City of Milwaukee, nominated by Mayor Cavalier Johnson
- Charles Roedel, deputy comptroller for the City of Milwaukee, nominated by Milwaukee Comptroller Bill Christianson
- Andy Holman, a certified public accountant, nominated by the School Board
- Ronda Kohlheim, inspector general for the City of Milwaukee, nominated by the MPS Office of Accountability and Efficiency
Forming this committee was required under the district’s corrective action plan. The School Board had approved a charter for the committee in March. Its purpose: to offer “objective, independent, unbiased, and knowledgeable” advice on audits of the district.
Zombor said this kind of committee, if it had been in place earlier, could have given board members another perspective when former administrators assured them they were making progress on addressing issues flagged by previous financial audits, including the district’s abnormal accounting practices.
“It would have given us an outside opinion on the progress that was or wasn’t being made,” Zombor said.
Board member Megan O’Halloran, who chairs the school board committee that reviews audits, said she wants the external audit committee’s insight to be shared not only with board members but also with the public.
“As we are working toward rebuilding credibility and trust with our community, I think this is an incredibly important step forward,” she said.
The new committee will also review the district’s internal audits. Following an annual audit plan, MPS’ internal auditors examine policy compliance at a number of individual schools each year, along with specific district issues that are identified in risk assessments as having a greater potential for waste, fraud or abuse.
MPS Chief Auditor Paul Geib said the district’s Office of Accountability and Efficiency plans to schedule an orientation for the new external committee in June.
Reporter Alec Johnson contributed to this report.
Contact Rory Linnane at [email protected]. Follow her on X at @RoryLinnane.
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