{"id":15903,"date":"2025-03-27T13:54:47","date_gmt":"2025-03-27T14:54:47","guid":{"rendered":"https:\/\/wifamily.news\/?p=15903"},"modified":"2025-03-27T15:07:14","modified_gmt":"2025-03-27T15:07:14","slug":"public-records-reveal-how-supt-underlys-dpi-set-stage-for-mps-finance-crisis","status":"publish","type":"post","link":"https:\/\/wifamily.news\/?p=15903","title":{"rendered":"Public Records Reveal How Supt. Underly\u2019s DPI Set Stage for MPS Finance Crisis"},"content":{"rendered":"<p>This post originally appeared at <a href=\"https:\/\/reforminggovernment.org\/public-records-reveal-how-supt-underlys-dpi-set-stage-for-mps-finance-crisis\/\">https:\/\/reforminggovernment.org\/public-records-reveal-how-supt-underlys-dpi-set-stage-for-mps-finance-crisis\/<\/a><\/p>\n<div><img decoding=\"async\" src=\"https:\/\/wifamily.news\/wp-content\/uploads\/2025\/03\/1.png\" class=\"ff-og-image-inserted\" \/><\/div>\n<p><b>Delafield, Wis.<\/b><span> \u2013 New <\/span><a href=\"https:\/\/drive.google.com\/file\/d\/1c3-CCNfdko7sL7frjdXRinmOgE0d4izz\/view?usp=sharing\"><span>public records<\/span><\/a><span> released Thursday by the Institute for Reforming Government\u2019s (IRG) Center for Investigative Oversight reveal how the Department of Public Instruction\u2019s lenient enforcement of Milwaukee Public Schools\u2019 2024 finance deadlines set up different, more destructive outcomes than DPI\u2019s stricter enforcement in previous years.<\/span><\/p>\n<p><span>Superintendent Underly\u2019s DPI released the <\/span><a href=\"https:\/\/drive.google.com\/file\/d\/1c3-CCNfdko7sL7frjdXRinmOgE0d4izz\/view?usp=sharing\"><span>records<\/span><\/a><span> March 5, 2025, <\/span><b>8 months after IRG\u2019s June 17, 2024<\/b><span>, request. DPI fulfilled the complete records request only after IRG, represented by the Wisconsin Institute for Law and Liberty, threatened legal action.<\/span><\/p>\n<p><b>WHY IT MATTERS<\/b><\/p>\n<p><span>DPI took a gentler approach with MPS than other school districts in years past, despite accurate financial documents being essential to determining state aid for all Wisconsin school districts. DPI has the ability to withhold funding if districts miss deadlines.<\/span><\/p>\n<p><span>DPI said withholding funds due to missing finance deadlines is a rare occurrence, despite enforcing said deadlines in the past. After MPS missed a December 2022 deadline, <\/span><b>DPI took threats of withheld aid payments directly to the MPS Board as early as February 2023 following late finance paperwork. <\/b><span>DPI previously withheld payments from other districts in March 2020 under former Superintendent Carolyn Stanford Taylor. This is a <\/span><b>stark difference from DPI\u2019s gentler approach to MPS in 2024.<\/b><\/p>\n<p><span>As DPI waited far too long to play hardball, former MPS Superintendent Keith Posley mismanaged the district, leading to his <\/span><a href=\"https:\/\/www.wpr.org\/news\/milwaukee-community-calls-for-mps-superintendent-to-be-fired\"><span>resignation<\/span><\/a><span>, MPS operations <\/span><a href=\"https:\/\/www.wuwm.com\/education\/2025-02-13\/mps-audit-ordered-by-governor-calls-for-changes\"><span>reviews<\/span><\/a><span>, and a Legislative Audit Bureau <\/span><a href=\"https:\/\/wisconsinexaminer.com\/2024\/08\/30\/divided-legislative-committee-launches-audits-of-dpi-and-dnr\"><span>audit<\/span><\/a><span> of DPI\u2019s compliance oversight.<\/span><\/p>\n<p><b>THE QUOTE:<\/b><\/p>\n<p><span>\u201cIt took 8 months and a legal threat against DPI to uncover what role they played in the Milwaukee Public Schools finance crisis of 2024,\u201d <\/span><b>said Chris Reader, IRG Executive Vice President. <\/b><span>\u201cSuperintendent Underly\u2019s administration treated MPS with kid gloves, which financially hurt districts across Wisconsin. The Department of Public Instruction should have acted, and now it\u2019s clear the inaction hurt Wisconsin students.\u201d\u00a0<\/span><\/p>\n<p><b>KEY RECORDS<\/b><\/p>\n<ul>\n<li><b>DPI well knew how MPS\u2019 inaccurate, time-consuming finance process affected DPI and other school districts.<\/b><span> In October 2023, DPI finance staff criticized MPS for <\/span><a href=\"https:\/\/dpi.wi.gov\/sfs\/fy-2024-25-wisfip-wisconsin-school-finance-reporting-portal-special-education-module-open\"><span>using<\/span><\/a><span> an alternative submission process instead of normal finance software, including a request to delete, correct, and replace 2023 finance data. ARM \u201chas to be for the intended purpose\u2026 Not school districts the size of Racine or MPS using it to upload data in small batches.\u201d A July 2023 discussion among DPI finance staff concluded, \u201cWe saw what a political mess it was when MPS gives us bad data for the October run\u2026\u2026their Oct-Jun adjustment (computed after they clean up their ledger after spring auditing) is huge and politically, we have to explain why this happened.\u201d In March 2024, as DPI met weekly with MPS, DPI received correspondence reading, \u201c\u2026It looks like Milwaukee will be playing havoc with the PY adjustments in the aid formula, similar to how their large shared cost adjustment affected all districts last year.\u201d DPI sent strict, step-by-step compliance recovery directions to MPS March 28, 2024. MPS <\/span><a href=\"https:\/\/www.jsonline.com\/story\/news\/education\/2024\/06\/24\/what-we-know-about-went-wrong-at-mps-after-financial-audit-letter\/74165329007\"><span>passed<\/span><\/a><span> a $252 million referendum April 2. (pages 301, 361, 72, 12)<\/span><\/li>\n<\/ul>\n<ul>\n<li><b>Superintendent Underly\u2019s DPI wrote contacting MPS\u2019 Board or threatening to withhold funds was \u201can extraordinary step\u201d that is \u201cexceedingly rare.\u201d <\/b><span>Then-DPI Communications Officer Chris Bucher argued DPI \u201cdid not have any reason to doubt [MPS\u2019] assurances\u201d it once again would provide its finance reports late but with sufficient time for DPI to calculate vital state aid reports and estimates. (Districts across Wisconsin rely on accurate estimates to produce stable budgets, and changes in massive Milwaukee can greatly affect their funding.) However, as weeks went by, DPI \u201ceventually went to the board.\u201d DPI waited to enforce deadlines because \u201cevery district is different and the DPI uses an individualized approach.\u201d Superintendent Jill Underly also <\/span><a href=\"https:\/\/youtu.be\/HmefdHL4vpI?si=Z9cS9b12RweWqNwS&amp;t=96\"><span>called<\/span><\/a><span> notifying the MPS Board \u201can extraordinary step.\u201d (pages 287, 640)<\/span><\/li>\n<\/ul>\n<ul>\n<li><b>But in 2023, DPI had directly threatened MPS\u2019 Board in February that it would withhold aid for late compliance, long before missed deadlines could become a crisis.<\/b><span> Then-DPI School Finance Services Director Mark Elworthy notified MPS February 6, 2023, by form email it would consider withholding aid payments \u201cshould the audited financial statements not be filed by February 15, 2023.\u201d Director Elworthy\u2019s email chain included then-Board President Robert Peterson, the MPS Board, then-Superintendent Posley, audit company Baker Tilly, and his Cabinet-level boss, then-DPI Finance and Management Assistant Superintendent Tricia Collins. (page 52)<\/span><\/li>\n<\/ul>\n<ul>\n<li><b>Former Superintendent Carolyn Stanford Taylor did withhold funding to compel district compliance.<\/b><span> In early 2020, DPI \u201cwithheld AGR and SPED payments\u2026due to non-submission of Budget Report and Audited Financial Statements\u201d from 4 districts, including 2 in Milwaukee County. The withheld payments <\/span><a href=\"https:\/\/dpi.wi.gov\/sites\/default\/files\/imce\/sfs\/pdf\/paysch25_.pdf\"><span>likely were<\/span><\/a><span> from February and March. In January 2021, DPI was about to withhold special-needs funding from MPS for <\/span><a href=\"https:\/\/www.wuwm.com\/education\/2021-01-27\/state-orders-mps-to-bring-some-students-with-disabilities-back-in-person\"><span>keeping<\/span><\/a><span> highly disabled students virtual, but MPS complied before DPI completed its process. (page 99)<\/span><\/li>\n<\/ul>\n<ul>\n<li><b>Correspondence from Superintendent Underly does not appear in the records.<\/b><span> Thus, it is not clear when Superintendent Underly realized MPS would affect 420 other traditional school districts. Deputy State Superintendent Thomas McCarthy <\/span><a href=\"https:\/\/wiseye.org\/2024\/08\/29\/joint-legislative-audit-committee-51\"><span>approximated<\/span><\/a><span>, \u201cWe were meeting [on] at least a weekly basis as things escalated into that May letter\u2026\u201d<\/span><\/li>\n<\/ul>\n<p><b>KEY QUESTIONS FOR DPI<\/b><\/p>\n<ul>\n<li><span>When was Superintendent Underly first informed of how MPS\u2019 crisis would affect other districts?<\/span><\/li>\n<\/ul>\n<ul>\n<li><span>Why did DPI tell the MPS Board in February 2023 about 2023\u2019s late finances but not inform the Board until May 2024 of their 2024 finance crisis?<\/span><\/li>\n<\/ul>\n<ul>\n<li><span>Had Superintendent Underly\u2019s administration withheld funds from districts before it did so for MPS in 2024? If not, was that a policy change from Superintendent Stanford Taylor\u2019s administration, which did withhold funds?<\/span><\/li>\n<\/ul>\n<ul>\n<li><span>Despite <\/span><a href=\"https:\/\/www.youtube.com\/live\/yJkvbQtgQQI?si=Shu986fEcyf10gR0&amp;t=2212\"><span>catching up<\/span><\/a><span> significantly, MPS <\/span><a href=\"https:\/\/milwaukeepublic.ic-board.com\/attachments\/b513b7a7-b7b4-4100-bab5-e29d59da8c7c.pdf\"><span>likely will miss<\/span><\/a><span> DPI\u2019s 2024 finance deadlines. Has DPI provided progress updates to Governor Evers, the Legislature, and other districts on MPS meeting its financial obligations?<\/span><\/li>\n<\/ul>\n<p><a href=\"https:\/\/drive.google.com\/file\/d\/1c3-CCNfdko7sL7frjdXRinmOgE0d4izz\/view?usp=sharing\"><span>View the records here.<\/span><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>This post originally appeared at https:\/\/reforminggovernment.org\/public-records-reveal-how-supt-underlys-dpi-set-stage-for-mps-finance-crisis\/ Delafield, Wis. \u2013 New public records released Thursday by&#8230;<\/p>\n","protected":false},"author":140,"featured_media":15905,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[22],"tags":[],"class_list":["post-15903","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-institute-for-reforming-government"],"_links":{"self":[{"href":"https:\/\/wifamily.news\/index.php?rest_route=\/wp\/v2\/posts\/15903","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/wifamily.news\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/wifamily.news\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/wifamily.news\/index.php?rest_route=\/wp\/v2\/users\/140"}],"replies":[{"embeddable":true,"href":"https:\/\/wifamily.news\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=15903"}],"version-history":[{"count":2,"href":"https:\/\/wifamily.news\/index.php?rest_route=\/wp\/v2\/posts\/15903\/revisions"}],"predecessor-version":[{"id":15906,"href":"https:\/\/wifamily.news\/index.php?rest_route=\/wp\/v2\/posts\/15903\/revisions\/15906"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/wifamily.news\/index.php?rest_route=\/wp\/v2\/media\/15905"}],"wp:attachment":[{"href":"https:\/\/wifamily.news\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=15903"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/wifamily.news\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=15903"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/wifamily.news\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=15903"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}