blame game

Paperwork snafu cost Detroit school district $6.5 million in state funds

PHOTO: Erin Einhorn
New Detroit school superintendent Nikolai Vitti addresses reporters outside a teacher hiring fair on his first full day in the job.

A member of Detroit Superintendent Nikolai Vitti’s finance team resigned suddenly on Thursday after officials discovered that $6.5 million worth of state reimbursements were likely never submitted in a paperwork snafu over the summer.

District officials said that Michael Bridges, a deputy executive director in finance for the Detroit Public Schools Community District, quit after Vitti accused him, and two others, of failing to submit an application for state funds that were owed to the district. Vitti had threatened to discipline the officials.

The error won’t affect current students because the problem relates to the old Detroit Public Schools, which exists only to pay down legacy debt and no longer runs schools.

The old district was replaced last year by the Detroit Public Schools Community District, which should not be affected by the error. 

The error, however, could affect how quickly old district can pay off its debts and it represents a black eye for a district that was just returned to a local school board after years under the control of state-appointed emergency managers.

At least one school board member was furious to learn what happened.

This is a major faux pas and impactful error!” the school board member, LaMar Lemmons, wrote in an angry email to Vitti and other board members that was obtained by Chalkbeat.

Lemmons’ email came in response to a note from Vitti on Monday to the board that explained the situation. In that note, which was part of the email chain, Vitti wrote:

“The state of Michigan reimburses districts for lost debt millage funds, as part of Public Act 86. In order to qualify for these funds, school districts must submit required documentation to the state by August 15th.

I learned today that the required documentation for Detroit Public Schools was not received by the state. Apparently, the forms were provided to the former CFO in the spring but not completed.

At this point, Detroit Public Schools is not eligible for the $6.5 million-dollar reimbursement from the state. After speaking with state officials, the available funds have already been disbursed to other qualifying entities. However, we will continue to petition the state to receive the reimbursement.”

Lemmons, according to the email chain, demanded an explanation, which Vitti provided Thursday, putting the blame on the district’s former chief financial officer:

“As a follow up to this issue and to address your request of a breakdown of what occurred, please note that, ultimately, the responsibility to submit the paperwork fell on then-CFO Marios Demetriou and two Executive Directors in Finance, Delores Brown and specifically Michael Bridges.

In the transition between [former interim Superintendent Alycia] Meriweather and I in early June, Mrs. Meriweather was informed through the Michigan superintendent listserve that the reimbursement form was due. Then CFO Demetriou informed us that he would handle and submit the paperwork. Then CFO was reminded that it was due through a Michigan chief officer list serve. He requested that Ms. Brown and Mr. Bridges have our outside financial advisors (PFM) complete the paperwork and return it to him. Mr. Bridges had the form completed by PFM and stated that he provided it to the then-CFO. However, there is no record of Mr. Bridges providing the information to then-CFO Demetriou for signature nor does the outgoing CFO recall the final stages of this process.

In the transition between Mr. Demetriou/Senior Staff and Mr. Saunders/Mr. Vidito, there was no mention or records regarding the need to submit the reimbursement paperwork. We will be taking disciplinary action with those in Finance who are still employed by the district.

In addition, please note that this reimbursement does not have a direct impact on DPSCD’s finances or day to day operations. It impacts the repayment of long-term DPS legacy debt. With that said, this is unacceptable. Disciplinary action will be taken and we will continue to proactively work with the Treasury to obtain the reimbursement.”

 

Vitti did not specify what disciplinary actions would be taken.

Before Thursday, both Bridges and Brown were employed by the Detroit Public Schools Community District. According to the district website, Bridges’ portfolio included General Ledger, Financial Reporting & Purchase Card.

Demetriou, who is now an Assistant Superintendent in the Ann Arbor school district, did not respond to a request for comment, but earlier in the day on Thursday, Bridges questioned Vitti’s version of events.

“I wouldn’t say I’m responsible,” Bridges said, when Chalkbeat reached him in his office on Thursday.

When told Vitti specifically stated he has no record of Bridges ever submitting the paperwork back to Demetriou, Bridges said, “I can’t concur with that.”

Bridges said a possible reason there is no record is because he would typically print out any forms Demetriou was meant to sign and send them to him via the internal mailing system.

“I would have likely walked it down to his inbox, and if he had any questions he would have followed up with me,” he said.

A short while later, Bridges quit, Vitti said.

A spokesman for the state education department declined to comment.

Battle to buy a school

Judge orders Detroit district leader to appear after issuing a stay in charter school property dispute

PHOTO: Anna Clark
The former Anna M. Joyce Elementary School in Detroit closed in 2009.

A Wayne County judge charged with settling a dispute between charter school Detroit Prep and the main Detroit district on Friday issued a stay and demanded that Superintendent Nikolai Vitti or one of his top deputies, along with a school board member, appear in court next month to discuss the case.

“Let’s get somebody, a board member, the superintendent – that would be my preference – or the deputy superintendent would be acceptable with the superintendent available by phone,” Judge David J. Allen said. “I’m sure he’s a busy man.”

Allen agreed on Friday to postpone making a decision over the disputed former Joyce Elementary School until next month. By then, Gov. Rick Snyder is likely to have signed legislation that could help the charter school, Detroit Prep, in its quest to buy the former Joyce school.

“I would bet my house that the governor will sign it,” said Detroit Public Schools Community District attorney, Jenice M. Mitchell Ford.

Detroit Prep has been trying to buy and renovate the former school building on Detroit’s east side but has been blocked by the district’s refusal to waive a deed restriction on the property. The building is owned by a private developer but a deed restriction requires the district to sign off on all uses of the buildings other than residential. Detroit Prep filed suit against the district in October.

The legislation, which was fast-tracked this week by state lawmakers — and supported exclusively by GOP members — clarifies language barring deed restrictions on buildings to be used for education purposes. Detroit Prep asked Allen to postpone his ruling until that law is signed.

“If passed, the Amendment will favor the plaintiff [Detroit Prep] in this case and adversely impact the District’s position, legal argument, etc.” Vitti said in an email to the state House Education Reform Committee chairman, Rep. Tim Kelly.

Detroit Prep’s lawyer, Jason R. Gourley, said that the bill could “be on the governor’s desk as early as next Tuesday.”

Battle to buy a school

Michigan House passes bill that will help local charter in its fight against the Detroit district

State Representative Tim Kelly, chairman of the Education Reform Committee, speaks on Senate Bill 702

GOP State House representatives today fast tracked a bill that will help local charter Detroit Prep in its fight against the Detroit Public Schools Community District.

The bill, which was passed without the support of a single Democrat, clarifies language on deed restrictions, making it illegal for government entities, including school districts, to use them to block educational institutions from acquiring former school buildings.

The district rejected the charter school’s use of the abandoned former Joyce Elementary school in September, despite it having already been sold to a private developer. The district invoked a stipulation in the property’s deed that required the district to sign off any non-residential use of the property. Detroit Prep, seeking more room for its growing student population, then filed suit in October against the district.

In December, Superintendent Nikolai Vitti wrote in an email to state Representative Tim Kelly, chairman of the House Education Reform Committee, that the proposed legislation would affect the district’s ability to fight Detroit Prep in court.

“If passed, the Amendment will favor the plaintiff [Detroit Prep] in this case and adversely impact the District’s position, legal argument, etc.,” Vitti wrote.

Representative Kelly has been a vocal critic of Vitti’s actions in the case, seeing the blockage as part of a larger pushback by the superintendent against charter schools. In a heated exchange at a hearing in Lansing last November, he aimed at Vitti, saying, “The reality is that deed restrictions are illegal now. Whether you like them or not, it is state law.”

The bill passed on Thursday clarifies a law that’s already in existence, Kelly said during the hearing, “but currently being flouted in certain areas of the state.”

The matter now shifts to the Wayne County Circuit Court on Friday, where the charter and district lawyers will meet at a hearing on Detroit Prep’s request for a delay in the case to give the bill enough time to be signed into law by the governor. Meanwhile, the district is arguing for the case to be thrown out altogether.

“I’m curious about the timing of this hearing when the judge is considering this case already,” said State Rep. Stephanie Chang (D-Detroit) during the hearing. “Is it appropriate for us to be pushing this legislation when there is a court hearing scheduled for tomorrow?”