Milwaukee Public Schools (MPS) has been dealing with significant financial mismanagement, resulting in severe consequences for the district and the broader state. As reported by Molly Beck from the Milwaukee Journal Sentinel, MPS’s inability to submit required financial data on time has jeopardized the district’s funding and impacted the financial planning of other school districts across Wisconsin.

According to the report, MPS has failed to provide annual reports and audits for the 2022-23 school year, as well as certified budget data for the 2023-24 school year. These documents were due last September and December. This delay has led the Wisconsin Department of Public Instruction (DPI) to consider withholding MPS’s special education funding and general aid payments, which could amount to significant financial losses for the district. Last year, the June payment for special education services alone was $15.7 million.

DPI Deputy State Superintendent John Johnson highlighted that MPS’s failure to provide complete and timely data has necessitated the use of unaudited financial data to estimate state funding for the next school year, a stopgap measure that does not fulfill MPS’s legal obligations. This situation underscores a pattern of incomplete and late submissions from MPS, further complicating financial planning across the state. DPI needs the data to determine what other school district will receive from the pie of money in state aid. 

Educationally, MPS is also failing its students. Approximately 90% of students are not reading at their grade level. This educational failure is compounded by the financial mismanagement that has plagued the district for years. In response to these issues, the district barely passed a referendum to raise its revenue limit by $252 million over four years to address the budget shortfalls, and yet, they are still cutting programs and laying off 288 staff, including 149 of those being teachers. 

The severe consequences that charter and choice schools face for failing to submit required annual financial documents—such as removal from programs—beg the question of whether similar repercussions will be imposed on Milwaukee Public Schools (MPS) for its repeated financial mismanagement. Despite the significant delays and inaccuracies in MPS’s financial reporting, which have already led to threats of withholding millions in state aid and special education funding, it remains to be seen if the district will face any substantial penalties. The disparity in accountability raises concerns about whether MPS will be held to the same standards as other educational institutions like the choice program, or if its status will allow it to escape the full extent of punitive measures.

This effort comes in the wake of federal officials suspending funding to MPS’s Head Start programs due to unresolved issues, further highlighting the district’s ongoing challenges

MPS board members, including Vice President Jilly Gokalgandhi, have acknowledged the severity of these issues. They claim to be working with subject matter experts to chart a path forward, which may include adding staff and filling vacancies in the finance department or bringing in external consultants to produce the required reports. The board has committed to ensuring all requested information is submitted in a timely manner to avoid future funding suspensions.

DPI has recommended that MPS hire an external financial consultant to help complete the missing reports and meet future deadlines. This recommendation comes after a previous audit conducted by Baker Tilly for the 2021-22 school year identified several weaknesses in MPS’s financial reporting. The audit found that MPS had not prepared financial statements in accordance with generally accepted accounting principles or state and federal funding schedules.

Nicole Armendariz, MPS’s communications director, stated that the district is actively working with the board and stakeholders to provide all necessary information as quickly as possible.