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Audit: Detroit Public Schools misused $53.6 million

Federal funds allocated for at-risk students were either questionably used or poorly documented.

by Jennifer Mrozowski

DETROIT -- Detroit Public Schools misused $53.6 million in federal funds designated for low-income children and should return that amount to the U.S. Department of Education or provide documents that the money was used properly, according to an audit of those funds from 2004 to 2006.

The federal education department's Office of Inspector General on Friday issued the audit of the district's Title I funds, which are to be used to improve teaching and learning of students at risk of failing to meet state academic standards. The audit uncovered more than $1 million questionable personnel expenditures and $52 million in inadequately documented costs.

DPS Spokesman Steve Wasko said the audit criticized the district for expenditures that occurred under past administrations.

"...As we have said, with so many other financial issues, systems and processes apparently were not in place," Wasko said. "The Michigan Department of Education has again voiced their ability to work with the present administration to correct problems of the past and implement appropriate policies and procedures now."

When contacted by The Detroit News on Tuesday, former district Superintendent William Coleman, who was in charge during some of that period, said he was on a conference call and couldn't immediately address questions.

The audit is the latest financial blow to DPS, which is trying to get rid of a $408 million deficit and pay past-due vendor bills. The district got $38 million in emergency payments from the state this month.

How much of the $53.6 million the district will have to repay is yet to be determined because the state and district officials plan to submit the desired documentation. That process could take several months.

"The Michigan Department of Education and Detroit Public Schools have been working closely since receiving the preliminary audit findings and have compiled thousands of pages of documentation, which will be submitted to (the U.S. Department of Education) to refute most findings," said MDE spokeswoman Jan Ellis.

The audit noted that Detroit Public Schools used Title I money for salaries, benefits and other personnel costs but did not adequately document those costs with time sheets showing the employees were working on activities that fall under the federal program.

In some cases, the district billed teachers' entire salaries to the federal program even though the teachers did not teach solely eligible children. In other cases, DPS provided examples of multiple employees' daily lesson plans or time logs but did not show how much time was spent on federally funded activities.

Auditors also criticized the Michigan Department of Education for poor oversight.

The auditors noted state and local officials questioned the audit's methodology and claimed reviewers used small sample sizes to arrive at findings for the whole district. Still, both the state and DPS said they are working to resolve some of the problems.

"(MDE) recognizes that the current DPS administration has inherited many flawed budget and record keeping policies and practices," Ellis said. "The department will be working with the district to ensure policies and procedures, as well as a strong system of internal controls is in place to prevent any technical or substantive issues in the future."

— Jennifer Mrozowski
Detroit News


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