MPS committee hears plan to address $46 million audit-identified deficit

Superintendent Brenda Cassellius told the Milwaukee School District’s Committee on Accountability, Finance and Personnel that district teams are undertaking a detailed review of contracts and personnel controls after audits identified a $46,000,000 shortfall. "We will be sure when we come with any reductions or efficiencies that we have to make in order to meet the $46,000,000 deficit that has been identified in the audit," she said.

The administration framed the work as part of a corrective action plan that includes improved budget controls, tighter position control in HR and upgrades to finance and HR systems. Budget Director Nick Sandram described a redesigned monthly report tied directly to the district’s financial system, providing a "live view" of expenditures, encumbrances and budgets and aligning district fund reporting with the state’s fund structure (fund 10 for school operations and fund 27 for special education).

Cassellius said the district has completed three audits in 13 months and is "digging into our contracts" to identify obligations that can be reduced or closed out. Sandram said staff have reviewed about 430 contracts so far and are working with the Office of Accountability and Efficiency and outside consultants to change historical practices that present multi‑year contract totals in a way that can inflate perceived single‑year obligations. "We're putting together a way to kind of reform those policies and practices and provide you with better visibility and access to our controls," Sandram said.

Administration emphasized that working‑budget figures can look larger than expected because they may display total multi‑year contract values rather than the amount anticipated to be spent in a single year; the chair gave an example of a multi‑year $17 million contract that might reflect about $5 million in a single year. Officials said changes to reporting and to the PeopleSoft and PowerSchool integrations should improve accuracy and reduce validation errors with the Department of Public Instruction.

The committee voted 4–0 to advance the administration’s recommendation and directed staff to return with modifications and further detail as the corrective action plan is implemented.