Detroit Schools Report Financial Progress!

Great news!

Detroit schools report financial progress
Marisa Schultz / The Detroit News
Nov. 12, 2009

Detroit -- Detroit Public Schools has whittled its deficit nearly $87 million and resolved most of the financial reporting issues that have plagued the district, according to an audit DPS released Wednesday.

The deficit had been estimated at $305.9 million if no action was taken to curb expenditures, but the recent Comprehensive Annual Financial Report and Annual Single Audit has put it at $219 million.

DPS submitted the report to the state Tuesday -- six days prior to the deadline, a change from DPS' history of late filings.

"We will not ever again repeat the actions and inaction that led to this budget being out of control, including seven consecutive years of deficit spending," said Emergency Financial Manager Robert Bobb. "And we know that our financial operations are directly linked to providing strong academic programs."

Gov. Jennifer Granholm appointed Bobb to oversee the district's finances in March. To combat the anticipated deficit, he closed 29 schools, announced layoffs of nearly 2,500 employees and conducted audits to weed out fraud and waste and boost accountability. Bobb agreed this fall to stay on for a second year.

"We fully acknowledge that significant work still needs to be done to completely eliminate the deficit over the next three to four years," said DPS Chief Financial Officer Ricardo Kisner.

Last year's audit found 84 areas the district needed to improve -- 53 involved financial reporting and 31 were for administering and compliance of federal programs. Bobb and his work group of financial experts have developed strategies that to date have resolved 76 percent of them.

The areas targeted include restructuring the finance division to recruit and retain competent staff; preparing comprehensive written policies for financial operations, establishing better oversight of bond money and other assets and leveraging new technologies for budget and forecasting systems.

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