Rhodes offers to facilitate audit of DPS

Shawn D. Lewis
The Detroit News
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The Detroit school board may be a step closer to a forensic audit of contracts in the financially struggling district after Emergency Manager Steven Rhodes said he might be able to arrange for someone to do the work for free.

DPS Transition Manager Judge Steven Rhodes

Rhodes met with board President Herman Davis on Tuesday.

“As a part of his commitment to an ongoing dialogue with the Detroit Board of Education, DPS transition manager Steven Rhodes today met with board President Herman Davis,” said district spokeswoman Michelle Zdrodowski in an email.

“During that meeting, Judge Rhodes offered to introduce President Davis to an individual who may be willing to provide the board with pro bono forensic accounting services. This connection has yet to be made, and no agreements have been reached.”

Davis said he “feels good” about the offer. “It gets us to the starting line,” he said.

Neither Davis nor Rhodes named the individual. The board president said some board members will meet with that person next week.

“We will decide how we want the audit conducted and what we want that person to do,” said Davis.

The board had its first meeting with Rhodes, who took office March 1, last Wednesday. Rhodes told the board at that time that the district, which is hundreds of millions of dollars in debt, did not have the money to pay for a forensic audit.

Detroit school board President Herman Davis

The school board and the Detroit Federation of Teachers have called for an audit of contracts in the state’s largest district in the wake of corruption scandal in which numerous DPS principals were charged with accepting kickbacks from vendor Norman Shy.

Ten DPS principals have pleaded guilty in the $2.7 million bribery scheme.

During the May 18 meeting with Rhodes, board member LaMar Lemmons asked if the emergency manager would support a forensic audit.Davis later said it would be an audit specifically of contracts over $10,000 from 2009 to the present.

Rhodes hesitated at requesting such an audit.

“I am not opposed to a forensic audit,” he said at the time. “But you have to be careful about the phraseology of ‘forensic audit.’ I know what they do and it would be a herculean task to do a general forensic audit.

“I won’t oppose it, but I don’t know who would pay for it.”

Rhodes has warned that DPS will run out of money by June 30 unless state lawmakers agree on a rescue package to pay off $515 million in district debt and provide startup funds for a new, debt-free Detroit district.

Senate Majority Leader Arlan Meekhof, who shepherded passage of a $715 million rescue package, is “actively working to reach a resolution on DPS,” spokeswoman Amber McCann said Tuesday.

A competing version passed by the House provides $500 million to pay off $467 million in district debt and provide $33 million in startup costs. The Michigan Department of Treasury has warned that under the House bill, a new Detroit district would be in debt in its second month of operation.

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