Posted on Saturday, June 18, 2005 - 3:33 pm:

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The Florida-based MGT of America, a consulting firm which has done work in 17 of the nation’s 25 largest school districts, said the mismanagement was chiefly responsible for gradually escalating deficits beginning with a $10.6 million shortfall in 1999-2000, and culminating in gaps of $123.3 million in 2003-04 and $123.7 million in 2004-05.

The report says that the district will have to pay the price of the mismanagement, as it must pay off $213 million, plus accumulating interest on state deficit reduction bonds it borrowed last year, over the next 15 years.

“The current financial position being faced by the Detroit Public Schools is the result of a management breakdown,” wrote MGT Senior Partner Linda Recio in the report.

“The lack of checks and balances provided by a Board of Education assisted in this breakdown, as there was no longer any process in place to provide effective oversight regarding financial activities. The laudable goal of providing improved educational programs became the focus of the organization and the availability of the resources to fund these activities became an after thought.”

The deficits accumulated under CEO’s David Adamany and Kenneth Burnley, and Board Presidents Freman Hendrix, Frank Fountain, and William Brooks, appointed at various times by both Mayor Dennis Archer and Mayor Kwame Kilpatrick.

Under their purview, the district has not even had a formal budget document to facilitate public review of school spending, according to the report.

“Detroit had a formal document prior to the current administration,” said Recio in an interview from her Tallahassee office. “What we received was a power point presentation. We were later given a line-item budget, but a formal budget is needed for public review.”

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Posted on Monday, June 20, 2005 - 11:01 pm:

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Report finds mismanagement cause of escalating deficits

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