December 8, 2008

LANSING – State Superintendent of Public Instruction Mike Flanagan declared today that the Detroit Public Schools is in a Financial Emergency. According to state law, an Emergency Financial Manager will be appointed to assume all financial authority in the district.

Flanagan informed Detroit Board of Education President Carla Scott that he made his decision after the district failed to abide by the conditions and detail required by a Consent Agreement entered into by the district and a Financial Review Team appointed by Governor Jennifer M. Granholm.

“The school children of Detroit are being deeply affected academically by the chronic inability of the district to manage its finances,” Flanagan said. “We cannot let this continue any longer.

“The students’ learning and achievement are suffering because of the district’s financial turmoil,” he said.

Flanagan stressed that appointing an Emergency Financial Manager is not a state takeover of the school district. The local school board and superintendent still will operate the district’s educational matters, he said.

“The Emergency Financial Manager’s role will be to balance the district’s budget, pay its bills, manage the spending, and establish strong and reliable financial systems to help the school board make sound academic decisions for the students of Detroit,” Flanagan said.

Flanagan determined the district violated the Consent Agreement when it failed to submit to the state a revised Deficit Elimination Plan, and a resolution giving the district’s Superintendent authority to implement a Deficit Elimination Plan without further involvement by the local board.

All budget documents submitted by the district have been determined unsatisfactory by the Department of Education. Another document required by the Consent Agreement, the district’s Accounts Payable report, also was not in compliance with the conditions laid out in the Consent Agreement.

According to state law, the Detroit Board of Education has 10 days in which to request a hearing to contest the determination of a Financial Emergency. Flanagan will begin vetting qualified candidates for Emergency Financial Manager. By law he can submit up to three names to the Governor from which she will choose and appoint.