MPS Meltdown: Why Didn’t DPI Inform Voters Before $252 Million Referendum?

State School Superintendent Jill Underly’s executive director, the powerful leftist ex-campaign operative Sachin Chheda, donated to the committee working to push through a $252 million Milwaukee Public Schools referendum at the same time DPI was failing to tell the public that the district had not turned in key financial data as far back as September.

DPI finally came clean with the public in a May 24 scathing letter to Milwaukee Public Schools that outlined a series of missing financial documents, including its annual report and certified budget data, a problem dating back months. The School Board, which was not told by DPI about the missing financial data until May 24, along with the public, met on June 3 to consider the fate of Superintendent Keith Posley, who is, correctly, absorbing a lot of the outrage. Posley ended up resigning.

According to DPI’s letter, MPS “continues to fail to provide key required financial data.” As of May 24, MPS had not submitted required financial reports, “some of which are now more than eight months overdue.”

The fiscal meltdown has significant impact. “Continuing to wait for MPS to submit its missing financial data jeopardizes the timing of the aid reports, negatively impacting every Wisconsin school district,” DPI wrote MPS in the May letter – conveniently about two months after the referendum.

Who knew what and when?

Who knew what and when? Why didn’t those people tell Milwaukee taxpayers before they voted on a $252 million referendum for MPS in April? Was there an active effort to cover up the problems before the referendum?

The state Department of Public Instruction, run by leftist Schools Superintendent Underly, knew for months before the April referendum election that MPS had failed to submit key financial data. We know this from the DPI’s own letter, which admits it.

Despite the lack of data, MPS based its referendum appeal on telling the public that the district would have a $200 million budget deficit in 2025 without the new funding. Due to the serious financial problems that were going on at the same time, it’s questionable how MPS could be so certain of that figure.

Chheda, who became Underly’s executive director last November after helping her campaign, was an unabashed supporter of the referendum. He donated $100 to the Vote Yes for MPS Committee in February, campaign finance records show. The teacher’s union and state Democratic Party were among the backers.

It goes without saying that, had DPI or MPS disclosed the ongoing financial failures to the public before the election, it might have failed. After all, the margin was very close – the referendum succeeded by just 1,720 votes.

“Thank goodness. Put kids first! Despite an incredibly offensive & dishonest (but effective) No campaign, and not the greatest of Yes campaigns, the people of Milwaukee put the children of Milwaukee first,” Chheda wrote on X when the referendum narrowly passed.

To her credit, CBS political reporter Emilee Fannon questioned Underly’s partisan hire, Chheda, about the failure to inform the public before the referendum that he championed. Chheda has performed political campaign work for a host of prominent Democrats, including liberal Supreme Court Justices Janet Protasiewicz and Jill Karofsky. For years, he was “the” Democratic political campaign operative in Wisconsin.

“I asked @WisconsinDPI why they didn’t inform the public months ago about MPS’s failure to disclose financial data when they began meeting in 2023 (months before a referendum asked residents for $252 million for the school district),” Fannon wrote on X.

“Why not disclose this information that DPI had about MPS before a $252 million referendum went to voters?” she asked him on video.

“I am going to be honest. I think that’s a fair question,” Chheda responded.

“I don’t think in March as you were leading up to the referendum that it was clear that they were as behind as they were. So what I would say is yes there was a report due in September. Yes, there was a report due in December,” he said.

“It is not particularly unusual for that December deadline to be missed a little bit, right, so going into March, knowing that we needed to kind of have more frequent conversation as we said in the letter. We were talking to them I think at that point weekly. It’s not fair to suggest that DPI knew that the scale of the problem is what it is, you know, two months ago. We’ve been learning on a daily and weekly basis where we’re at, and we’re engaging in a deeper, deeper level.”

Let’s scrutinize his statement. Why wasn’t it clear? How could it not be, if MPS was being honest with DPI and/or DPI, the state oversight agency for K-12 school districts, was doing its job? Even Democratic Gov. Tony Evers criticized DPI, saying he thought stronger action should have been taken sooner. But that would have been bad for the referendum, no?

Chheda also said this to WTMJ-TV: “Prior to the April referendum we weren’t in a position where our expectations were that they weren’t going to be able to file the required financial information.”

Why not? As of April, MPS still hadn’t turned in the following financial data, per DPI’s letter:

• FY23 Auditor Aid Certification and Auditor Fund Balance – Due September 15,
2023
• FY23 Annual Report – Due September 22, 2023
• FY23 District Audited Financials – Due December 15, 2023
• FY24 Certified Budget Data – Due December 1, 2023

Why weren’t voters at least told about that?

DPI staff was meeting with MPS weekly in the time frame that Chheda says DPI wasn’t really clear what was going on, at least not the scope. How could they be so clueless? Why weren’t they already engaging in a “deeper, deeper level,” since data was missing since at least September?

“In an effort to collect the missing financial data from MPS, DPI staff has been meeting with MPS quarterly since April 2023, then monthly as of February 2024, then weekly as of March 15, 2024, and now daily as of May 2024,” the letter from DPI to Posley says.

The other obvious question is why MPS did not communicate to taxpayers about the scale of the problem. For that matter, what did the governor and Milwaukee mayor know, and when? Who else knew this was going on and chose not to inform Milwaukee taxpayers?

In the letter to Posley, DPI wrote, “This letter is a follow-up to multiple conversations and correspondence the Department of Public Instruction (DPI) has had with you and your staff regarding reporting and submittals of Milwaukee Public School District’s (MPS) statutorily required financial data.”

“Not only are many required reports incredibly late, MPS has demonstrated a pattern of submitting incomplete data, as well as requesting data changes without having the required documentation for the request,” it says.

According to the letter, DPI “relies on the above-referenced data to complete two state school aid reports. In addition, the June 10, 2024, Special Education and School-Age Parents Aid payment relies on data from the annual report.”

The letter outlines a complete meltdown of MPS’s finances.

“First, as we have discussed, failure to submit the missing financial data directly impacts DPI’s ability to begin its work on the June 2024 final general aid report,” it says. “Furthermore, MPS’s failure to submit its 2023-2024 certified budget data in WISEdata Finance, due December 1, 2023, creates significant challenges for DPI to complete its statutorily- required July 1 general school aids estimate.”

The letter continues: “The disruption of DPI’s work impacts every school district in the state. Wisconsin school districts rely on accurate aid run calculations to effectively budget, operate, manage cash flow, and support students. Second, based on the information and data MPS has submitted to date, there will likely be a significant reduction in state general aid payments for MPS in the 2024-2025 fiscal year. This reduction is the result of MPS errors in reported 2022-2023 shared costs.”

The letter says, “Because MPS has not submitted this required financial data, DPI may withhold MPS’s June special education categorical aid payment. Last year (June 2023), this payment was approximately $15.7 million. DPI may also withhold future MPS state aid payments, beginning with the June and/or September aid payment.”

The letter demanded daily meetings and a corrective action plan.