News Story

Flint Schools Back In Debt After One-Year Hiatus

District may have overspent budget after finally paying off past debt last year

After years of overspending, the Flint public school district emerged out of deficit in 2018. But Flint Community Schools might already be back in overspending mode, if audits confirm its preliminary year-end figures for the 2018-19 fiscal year that ended June 30, 2019.

That’s what data collected by the Michigan Department of Education indicates, although department officials have not yet seen the audited report that will provide the official figures.

Flint Superintendent Derrick Lopez didn’t return an email seeking comment.

The information submitted by the school district to the state tells a familiar story of a financially troubled school district: a drop in enrollment coupled with an increase in hiring.

In the audited financial report for the district’s previous fiscal year, 2017-18, Flint schools overspent its general fund operations revenue by $6.58 million. The auditing firm Plante Moran warned a year ago that the district would have to reduce staffing considerably not to go into deficit again in 2018-19.

Here’s how the troubling trend appears in data from the state’s Center for Educational Performance and Information:

Flint schools increased hiring between 2014-15 and 2018-19 despite a dramatic drop in enrollment. Staffing rose from 732 full-time employees in 2014-15 to 831 in 2018-19. At the same time, enrollment fell from 6,533 to 4,245, a 35% drop over four years.

But the financial situation might even be worse than the preliminary figures suggest, because it’s not clear how much the data from the Flint school district can be relied upon.

In 2018, auditors’ notes highlighted serious issues with the district’s bookkeeping, or lack thereof in some cases.

The most recent available audited budget had a note from Plante Moran, which wrote, “Material transactions were not reflected in the final amended budget for the fiscal year ended June 30, 2018 or in the originally adopted budget for the fiscal year ending June 30, 2019.”

In what was reported as one of several recurring issues, the auditor noted that the school district couldn’t show that its Board of Education approved two contracts to vendors for services before the district hired and paid for the services. The auditor also stated that the district paid vendors with federal grant dollars before documenting that the services were actually provided.

The most recent audited financial report available for the district is for 2017-18, and it shows the district spending down its available reserves from $7.6 million to $1.8 million, with annual expenditures of $77.4 million.

The Flint school district entered a deficit situation in 2010-11, overspending its budget by $3.7 million. Successive failures to match annual spending to annual revenue grew into a debt that the district only escaped in 2018.