DPS restructuring showing improvement

District deficit $22 million less than projected due to cooperative cost containment efforts and continued enrollment stabilization

Recent restructuring efforts are having a positive impact on Detroit Public Schools finances according to results of a recently filed audit of the 2014-15 fiscal year, though the district still faces dramatic financial challenges.

DPS had projected an annual deficit in the range of $70 million, but the audit filed with the State of Michigan on Nov. 2, 2015, shows an actual deficit of $46.5 million, a reduction of about $22 million. The district still faces a significant legacy liability of approximately $515 million.

“Detroit students need the best education possible, and significant financial challenges make it more difficult to meet academic goals,” said DPS Emergency Manager Darnell Earley, ICMA-CM, MPA. “Although we must remain focused on the full implementation of the transformation we began earlier this year, the results of the audit show that DPS is making strides to address the serious financial challenges that have been plaguing it for decades.”

Earley said he is proud of the district and its employees for embracing the change necessary to alter its course toward a more sustainable future, and thanks them for their continued cooperation in this time of sacrifice and compromise on behalf of the students we serve. He remains confident that if DPS continues to follow the plan it has in place, it will be able to manage itself moving forward.

“Our team is working diligently every day to become a solvent school system which will allow local control to be restored,” stated Earley.

Cost containment efforts that helped the district achieve these improved financial results included, but were not limited to, continued reductions in non-classroom related expenditures, modifications to the district’s healthcare benefits, and personnel actions taken in conjunction with the ongoing restructuring of central office operations.

Another positive sign is the District’s continued trend of enrollment stabilization. In the past DPS has seen enrollment losses of 10-11 percent a year, but during the 2014-15 fiscal year the district experienced a loss of just 2.7 percent of its student population. In addition, student enrollment numbers for the 2015-16 fiscal year appear to be continuing on this positive trajectory, with preliminary fall enrollment numbers coming in at 46,325, which is approximately 30 more than were budgeted for FY2016. This 1.7 percent loss is the lowest year-over-year student decline in at least a decade. Stabilizing the enrollment is a key factor to the longevity of DPS.

DPS’ auditors, Rehmann, presented the FY2015 audit results to the Detroit Board of Education on Thursday, Nov 12, 2015 at Frederick Douglass Academy.

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