Detroit Financial Review Commission Releases Detroit Public Schools and Detroit Public Schools Community District from Active State Oversight
Oct. 26, 2020
The Detroit Financial Review Commission (FRC) voted unanimously today to immediately grant a waiver that releases both Detroit Public Schools (DPS) and Detroit Public Schools Community District (DPSCD) from active state oversight. The elected DPSCD School Board and its appointed Superintendent manage the district along with DPS, which solely functions to manage the district’s legacy debt.
By providing a waiver to both entities, the commission no longer has final decision-making authority over the districts’ budgets, collective bargaining agreements and contracts. DPSCD also regains the ability to make budget changes without the commission’s approval.
“This is a monumental day for the state of Michigan,” said State Treasurer Rachael Eubanks, chairperson of the Detroit FRC. “Our largest school district has shown leadership in having three consecutive balanced budgets with minimal oversight of day-to-day operations. I congratulate Detroit residents, parents, families, students and district officials for this historic accomplishment.”
To become eligible for the waiver, DPS and DPSCD had to adopt deficit-free budgets for three consecutive years, obtain the ability to sell and guarantee municipal securities or other similar debt, and follow generally accepted accounting practices as required under state law, as well as meet other technical requirements.
“Without question, this is one of the greatest accomplishments of this School Board and Administrative Team over the last four years. We met several financial requirements while enhancing student programming, increasing teacher pay, and shifting away from contracted services for greater full-time employment. When we look back at our turnaround and rebuilding work, this will be one of those concrete examples of strong leadership,” said Dr. Nikolai P. Vitti, Superintendent of DPSCD.
The Detroit FRC will continue to exist and meet monthly to ensure both school districts meet the conditions of a waiver, although it will play no active role in day-to-day operations.
The school districts will be required to submit monthly financial reports, adopted budgets and financial plans each year. If the school districts continue to balance their budgets and meet other basic fiscal requirements, the commission will have limited oversight for the rest of its existence.
The Detroit FRC was initially created in late-2014 to provide oversight of the city of Detroit. In mid-2016, the commission was given additional oversight of the Detroit Public Schools and Detroit Public Schools Community District following state law changes.
Detroit Public Schools Community District was established to educate students of the city of Detroit, while Detroit Public Schools exists to repay outstanding debt.
The Detroit FRC is responsible for oversight of the city of Detroit, Detroit Public Schools and the Detroit Public Schools Community District. It ensures those entities meet statutory requirements, reviews and approves their budgets, and establishes programs and requirements for prudent fiscal management, among other roles and responsibilities.
The FRC members include five appointed members and six ex-officio members, which are the State Treasurer (who serves as chairperson), the State Budget Director (who serves as the designee of the Director of the Michigan Department of Technology, Management and Budget), the Mayor and City Council President of the city of Detroit, and the Superintendent and School Board Chairperson of the Detroit Public Schools Community District.
To learn more about the Detroit FRC, go to www.Michigan.gov/DetroitFRC.