The news late last month that Detroit Public Schools had failed to meet the deadlines necessary to receive a sizable payout from the state sounds all too familiar. These are headlines we’d hoped we wouldn’t be seeing anymore, now that the Detroit district is under new leadership.
After years of failed leadership, financial mismanagement and state intervention, the last thing the new Detroit Public Schools Community District needs is to slip back into old habits. It appears that Superintendent Nikolai Vitti is on top of the situation, and he’s said disciplinary action will follow. But Vitti must be 100 percent sure he can trust his staff not to make such costly errors. If he can’t, he must replace them.
In 2016, the state passed a $617 million bailout of the Detroit district. That action separated the district’s debt from a new district that could start fresh.
So the old district is still obligated to pay down its past operating debt, and school officials need to uphold their end of the bargain.
Yet because of incompetence within the school office (and two missed deadlines last year), the district lost out on $6.5 million in aid from the state to help pay down its debt.
“At this point, Detroit Public Schools is not eligible for the $6.5 million-dollar reimbursement from the state,” Vitti told school board members in an email last month. “After speaking with state officials, the available funds have already been disbursed to other qualifying entities.”
Several board members expressed their disappointment and outrage. LaMar Lemmons called this a “major faux pas” and he’s right about that. The elected board, which is starting its second year of oversight, should make sure safeguards are put in place to prevent similar blunders.
According to Vitti, former CFO Marios Demetriou received the documents but never completed them or sent them to the state.
Along with Demetriou, two executive directors in finance also hold responsibility, including Delores Brown and Michael Bridges. Bridges turned in his resignation after the news broke.
While the missed payout from the state won’t hurt the day-to-day operations of the new district (which educates students), it looks bad and delays repayment of the legacy debt. And as Vitti says, it’s “unacceptable.”
“The inability to submit the reimbursement form on time is a vestige of the past that continues to haunt the district,” Vitti said in a statement. “This is directly associated with the need for stronger leaders, systems, and processes. The individuals who were closest to the responsibility to submit the form will no longer be with the district.”
Gov. Rick Snyder recently told us that he is pleased with the district’s new leadership and how things are going following the bailout. Yet the governor’s office is very aware of this mishap, and plans to be more engaged moving forward and available to offer assistance.
In addition, under the bailout legislation, the Financial Review Commission that oversees the city of Detroit’s finances post-bankruptcy was extended to include the Detroit school district. Clearly, this is an instance where that review board could have been more involved and made sure the district was meeting these basic deadlines.
As the district seeks to move on from its troubled past, more coordination among district officials, the review board and the state Treasury Department will be essential going forward.