MPS board says there are “ongoing investigations” into missing reports

Ahead of a Milwaukee school board meeting where council members are scheduled to discuss the possible firing of Superintendent Keith Posley, council chair Marva Herndon said at a press conference that an investigation is underway.

Herndon did not explain the scope of the investigation or answer questions.

“We are working with our stakeholders to conduct a thorough, expedited and timely investigation,” Herndon said. “Because the investigation is still ongoing, the board is limited in the information it can share at this time.”

Monday’s special board meeting comes days after board members discovered that MPS had failed to file key financial reports with state agencies. According to the meeting announcement, board members could discuss Posley’s employment in closed session before potentially returning to a public meeting to take action.

The board will also discuss hiring a new financial consultant, Todd Gray, to help the district complete its reports to the state Department of Education and will hold a public hearing on the district’s budget.

Dozens of community members gathered in the board meeting room to demand that Posley lose his job.

MPS failures jeopardize state and federal funding

Posley has come under fire after both state and federal authorities raised alarm about MPS’s activities.

On May 21, federal agencies cut off funding for MPS Head Start facilities, which are state-funded preschool programs. The district failed to fix problems after some children were found unattended or abused by staff, federal officials said.

According to the district’s budget, MPS had expected to spend about $10.5 million on Head Start programs next school year. The district could lose that funding if federal regulators do not determine that MPS has fixed problems in its programs.

On May 24, state officials threatened to cut off general funding to MPS schools because the district failed to file key financial reports due last year — including an annual audit that could potentially uncover additional problems.

If the DPI stops funding MPS, the district can get the funds back when it completes its reports, DPI officials said. However, the DPI has also found that MPS made errors in its reported costs for the 2022-23 school year, which could result in a “significant reduction” in state support for the 2024-25 school year, according to a DPI spokesperson.

MPS has previously submitted its financial reports late

MPS also submitted its latest audit to the state late. A DPI spokesperson confirmed Monday that DPI submitted its 2021-22 audit of Baker Tilly on March 29, 2023. It would have been due on December 15, 2022.

DPI did not immediately respond to questions from the Journal Sentinel about whether DPI threatened to withhold funding during last year’s delay.

Martha Kreitzman, MPS’s chief financial officer, acknowledged last year that completing the previous audit had been challenging due to vacancies in key positions and turnover in the finance department.

In that audit, which was presented to board members on March 24, 2023, Baker Tilly found that MPS had not prepared financial statements “in accordance with generally accepted accounting principles” or in accordance with state and federal funding plans.

Kreitzman said in December the district is addressing the problem by hiring more staff and working with a job placement agency and outside financial consultants from Protiviti. MPS did not respond to a question from the Journal Sentinel about how many vacancies there are currently in the finance office.

A Baker Tilly spokesman said the company does not comment on matters concerning its clients.

Criticism of state officials for not raising the alarm earlier

After MPS submitted its previous months of audits in late March 2023, DPI began holding quarterly meetings with MPS starting in April 2023, DPI officials said.

After MPS again missed its reporting deadlines in December, DPI began holding monthly meetings with MPS in February. Meetings moved to weekly meetings in March and to daily meetings in May.

Sachin Chheda, executive director of DPI, said that while it is common for some school districts to be late in filing their financial reports, the delay at MPS is “particularly significant.”

Milwaukee school board members said they were not informed of late reports until May 24. When asked why DPI did not inform school board members earlier, DPI spokesman Chris Bucher replied, “Because that would be an extraordinary step.”

The DPI did not immediately respond to questions from the Journal Sentinel about when the department typically notifies school board members or threatens to cut funds due to late reports.

Daniel Bush, who was DPI’s director of school finance from 2019 to 2022 and was on the team in previous years, said that during his time there, DPI threatened districts with withholding aid once or twice over late reporting. He said that step was taken much sooner than DPI in this case.

“When I was at DPI, in November or December, they would go to the school board chairman and refuse to help because of late reports and missing audits,” Bush said.

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