Detroit Public Schools Reports Progress On Fixing Finances
DETROIT (WWJ) – It’s some news of improvement for the Detroit Public Schools as the district has managed to reduce its financial deficit.
The district reported it generated its first annual operating surplus since 2007 and reduced its negative fund balance by over $43 million (13 percent) for the 2010-11 fiscal year. DPS accelerated the elimination of its $327 million legacy deficit, reduced total expenditures by more than 8 percent and reduced debt service cost by almost $6 million.
The “2010-2011 Consolidated Annual Financial Report” was released today by DPS’ CFO Bill Aldridge and Emergency Manager Roy Roberts.
Aldirge said one of the steps they’ll take this year to meet challenges the district still has is the implementation of a zero-budgeting plan.
“It simply requires managers to justify every single dollar … that’s allocated to them in their budget,” said Aldirge. “It does two things: One, it does away with old incremental, add 5 percent to last year and keep rolling. We’re not in that business anymore.”
Roberts said the audit demonstrating a reduction in the deficit is one of a number of key financial accomplishments established over the last six months including:
- Adopting a balanced budget for FY 2012
- Completing a $200 million financing transaction at an attractive interest rate of 4.7 percent, reducing DPS’ cost of borrowing by almost 200 basis points (2 percent) and extending the final maturity from less than one year to ten years
- Receiving a favorable A+ Standard & Poor’s credit rating
- Michigan Department of Education’s declaration that DPS is in compliance with state and federal requirements for special education for the first time since 2007, reinstating $4.8 million in federal funding
- Student enrollment exceeded budgeted projections by 234 FTE (unaudited)
- Issuing an order reducing wages and benefits
- Creation of the Education Achievement Authority as a mechanism to provide much needed additional support to schools in greatest need
Roberts told reporters that while they’re proud of their progress, there are still challenges ahead. With limited resources in the face of declining enrollment, he said the district will have to do more with what it has.
“These reports, submitted on time, reflect the fact that we are moving solidly in the right direction — Careful financial planning, sacrifices across the board while maintaining a focus on teaching and learning have paid dividends,” Roberts said. “Amidst the district’s financial and budgetary challenges we are determined to educate all students. To do this we are redesigning the district and its educational programs, and will not waiver from focusing available resources on ensuring high standards in a rigorous curriculum and creating accountability systems for student achievement.”
– View a copy of the report (.pdf format) –