Deficit District Information and Required Forms
Deficit District Information
A district is considered to have a deficit fund balance if it has adopted a deficit budget or incurred an operating deficit as evidenced by the following;
1) Its Total General Fund balance is negative, or projected to be negative at the end of the current fiscal year; or,
2) Other funds have negative fund balances or projected negative fund balances that are greater than the General Fund balance.
Districts should notify the Michigan Department of Education, State Aid and School Finance Office as soon as they discover a deficit fund balance exists. The notification should be in written form and mailed to: Phil Boone (BooneP2@michigan.gov) or Chad Urchike (UrchikeC1@michigan.gov) The US Postal Address is Michigan Department of Education, State Aid and School Finance, PO Box 30008, Lansing, MI 48909
Reports to Legislature As Required under MCL 388.1702(1)
Deficit Elimination Plan Form
Section 1220 of the Revised School Code (MCL 380.1220) states that “when approving a deficit elimination plan, the superintendent of public instruction shall establish the period of time within which” a school must eliminate its deficit. The Department expects that when a Deficit Elimination Plan is submitted for approval, it represents the school’s best effort at eliminating the deficit. During our review, the length of each plan will be considered for reasonableness.
Please note that Section 4 of the Local Financial Stability and Choice Act (MCL 141.1544) provides that the state financial authority shall conduct a preliminary review to determine the existence of financial stress if a school submits a Deficit Elimination Plan that eliminates the deficit over a period exceeding five years.