MDE reviews early warning plan for deficit schools

If the Legislature provides the funding, the Michigan Department of Education (MDE) will implement a new plan to help school districts with budget deficits. The plan is part of Gov. Snyder’s budget recommendations. Currently, there are 46 school districts with budget deficits.

The new procedure would team MDE with the Department of Treasury to provide assistance with a school district’s deficit elimination plan before an emergency manager would be used. The plan would use declining enrollment, fund balance decreases and other measures as early warning signs that a district is in trouble.

No language for a bill has been drafted, but MDE officials want to make sure the Treasury Department will only focus on the financial health of a school district and not be involved in the district’s education program. MDE is also requesting that the state’s audit reporting deadline for schools be moved up to Oct. 15 from November for earlier detection of possible financial problems.  MDE wants expanded academic plans to be used with deficit elimination plans to guarantee a district can still provide a quality education while addressing the financial crisis.

While MDE is encouraged by the plan and hopes their recommendations are adopted, board members pointed out that many of the financial problems school districts are dealing with were caused by the state and its lack of adequate funding for education.