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Detroit Schools Regain Some Financial, Administrative Control

By guest blogger Gina Cairney

The Michigan Department of Education has taken Detroit Public Schools off of federal "high-risk" status after five years of what the state department considers "systemic improvements in its administrative and financial procedures," according to a statement.

What does this mean for the long-troubled 49,000-student district?

The district won't need the state department of education to approve its school improvement plans, and no longer has to put out a bid for purchase or service agreements exceeding $25,000.

The lift of the high-risk designation will allow Detroit Public Schools to slowly regain some independence with regard to control of its financial and administrative functions, and allow the district to become eligible to apply for federal and state grants, William Aldridge, the district chief financial officer told the Detroit Free Press.

Shedding the high-risk status also will allow the school system to solicit donations from businesses, he said.

"Removal from federal high-risk status is further evidence of DPS' growing stabilization as a district," DPS Emergency Manager Jack Martin said in the statement, and "will offer [the district] a greater access to both private and public funds to assist us as we continue to implement our five-year strategic plan."

But this doesn't mean the district no longer needs an emergency manager, noted State Superintendent Mike Flanagan.

Before taking the troubled district off the list, Flanagan approved a district-submitted plan to eliminate its deficit, which according to the Detroit Free Press, has grown to $80 million, from about $72 million in 2012.

Although shedding the high-risk status is good for the district, its troubles are far from over.

The school district recently went through three emergency managers, and has been faced with serious financial problems for some time. Once a thriving industrial center, the city itself has undergone major economic and demographic changes, leading it to file for bankruptcy earlier this year.

The district was placed on high-risk status after the U.S. Department of Education's office of inspector general in 2008 audited its records related to federal Title I grants from 2004-2006. The inspector general issued an audit report that included questions regarding the spending and record-keeping of $53.6 million in federal funds, according to the statement.

Through a signed memorandum of agreement, the Michigan Department of Education will continue to monitor Detroit Public Schools on multiple factors including student achievement, implementation of district policies and procedures, and the appropriate use of grants for specific programs.

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