December 8, 2008 / 7:11 PM / 11 years ago

Detroit public schools in fiscal emergency

CHICAGO (Reuters) - Detroit public schools are in a financial emergency and a manager will be appointed to take over the district’s finances, Michigan’s superintendent of public instruction said on Monday.

“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,” Superintendent Mike Flanagan said in a statement.

The district’s board of education will continue to oversee educational matters, he added.

The move was triggered by the school system’s failure to meet conditions of a consent agreement from earlier this fall by not submitting to the state a revised deficit elimination plan, as well as authority for the district’s superintendent to implement the plan, the statement said.

Flanagan’s statement also said budget documents submitted by the district were “unsatisfactory,” and that an accounts payable report was not in compliance with the consent agreement.

The Detroit Public Schools has 10 days to contest the state’s determination ahead of Flanagan submitting up to three candidates for financial manager to Gov. Jennifer Granholm.

A spokesman for the district did not immediately answer an email requesting comment.

In a November 26 statement, the district said it had already taken steps to cut spending by $143.5 million out of $172.6 million in targeted savings by June 2009.

Reporting by Karen Pierog; Editing by Kenneth Barry

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