Detroit School District Out From Under State Oversight

DETROIT, MI — The Detroit school district is, for the first time in 11 years, out from under state oversight.

The Detroit Financial Review Commission voted unanimously Monday to immediately grant a waiver that releases both Detroit Public Schools and Detroit Public Schools Community District from active state oversight.

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,” Michigan Treasurer Rachael Eubanks, the chairperson of the Detroit FRC, said. “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.”

The districts were required to adopt deficit-free budgets for three straight years, obtain the ability to sell and guarantee municipal securities or other similar debt and follow accepted accounting practices.

“Without question, this is one of the greatest accomplishments of this School Board and Administrative Team over the last four years," Detroit Public Schools Community District Superintendent Nikolai Vitti said in a statement. "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."

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 state said.

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, according to the state.

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.