Wisconsin DPI cuts funding to MPS due to lack of audit and late reporting

State officials are denying aid to Milwaukee Public Schools because the school district failed to file financial reports due in September.

The state Department of Public Education notified the district Thursday that the department had withheld a $16.6 million payment to MPS for special education services.

County officials, who were warned that this suspension could occur if the district fails to file its late reports, have said the funding shortfall will not impact staffing, hiring or other operations. DPI officials have said the district can get the funds back after filing its late reports.

Jilly Gokalgandhi, vice president of the Milwaukee School Board, said there would be no “cash flow problem.”

The DPI has warned that it may continue to deny a general relief payment on June 17 if the district does not have a DPI-approved corrective action plan.

Milwaukee school board members said Wednesday they submitted a draft corrections plan to the DPI on Wednesday. Gokalgandhi said Thursday the DPI provided comments on the draft and the MPS is working on revisions.

Chris Bucher, DPI communications officer, said in a statement that the department will continue to work with MPS on that plan and that he is “optimistic” that a plan will be in place in time for the district to receive its general assistance payment on June 17. The department will then release the special education payment, Bucher said.

“We knew this was going to happen,” Gokalgandhi said. “It’s not a surprise and we are working on our corrective action plan, which we will finalize soon.”

After months of discussions with MPS administration about submitting the late reports, DPI contacted the Milwaukee School Board directly on May 24 and informed them that the district’s funding would be at risk if the district did not submit the reports.

The district has not yet filed its financial statements for the 2022-23 school year, which are being processed by Baker Tilly. District officials have provided little information about why those financial statements are late. After the district’s previous financial statements were filed late, the district’s chief financial officer said staffing shortages were an issue.

Alfredo Balmaseda, the county auditor who handled the county’s financial reports, said he was fired Tuesday. He also said staff turnover and vacancies in the finance office were a problem, in addition to a faulty accounting system. The county did not answer questions this week about the accounting system or current vacancies in the finance office.

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