The Minneapolis Public Schools Board of Education Finance Committee met on September 19 for its first meeting of the school year. Committee chair Abdul Abdi was joined by school board members Ira Jourdain, Joyner Emerick, Interim Superintendent Rochelle Cox and Senior Officer of Finance and Operations Ibrahima Diop. Director Sharon El-Amin was absent.
At the meeting, the committee discussed the district’s food service fund, the property levy, the annual third-party audit, and a calendar of the finance department’s work for this school year.
“We had a whole year to do something about it and we did not,” Jourdain said. “I’ve been screaming from the rooftops for over a year about [the fiscal crisis]. It doesn’t matter who is on the board, people are just not listening.”
According to Thom Roethke, Director of Budget, Planning and Analysis, the district’s food service fund has a deficit of $5.6 million. The food service fund deficit is driven by declining enrollment, Senior Officer of Finance and Operations, Ibrahima Diop said at the meeting. The district is required by law to use general fund revenue to cover the deficit. So, when the annual third-party audit for the 2023 fiscal year is completed, the district will transfer money from its general fund to bring the food service fund to a zero balance.
Despite the passage of universal meals legislation, the district expects the food service fund to also run a deficit during the 2024 fiscal year, according to Roethke. The district is operating the same number of kitchens, but serving fewer meals as enrollment decreases, which reduces the revenue that comes into the food service fund.
In its September 19 filing with the Minnesota Department of Education, the district anticipates this year’s enrollment will be 27,094 “Resident ADM.” Resident ADM is the average of the number of students enrolled in MPS over the school year who also live within district boundaries. Compared to the 2022-23 school year, the estimated Resident ADM represents a decline of about 1,000 students from the 2022-23 school year. Non-resident ADM typically makes up a small percentage of overall district enrollment.
The district is planning to authorize the maximum property levy amount for the upcoming year, as it has in recent years. The board will vote on a resolution to authorize the property tax levy at its December 12 meeting, which will also serve as the district’s annual truth-in-taxation meeting.
At the meeting, Finance Committee Chair Abdul Abdi asked for the finance department to bring the committee information about all of the district’s third party contracts at a future meeting. He would like the committee to have this information as part of the “school transformation” process that the board will be engaged with this year. The board has used the term “school transformation” to talk about a district-wide initiative to address the district’s financial and other challenges.
The district is in the middle of its annual external audit process. According to MPS Executive Director of Finance Duke Fokuo, the audit, performed by the firm BerganKDV, is currently going smoothly and no issues have been reported by the auditors. The audit report is typically presented to the finance committee at the end of November, and received by the board at its December business meeting.
In prior years, the district has had an audit finding for separation of duties because of limited staffing in the finance department. In the budget for this year, the board included funding to adequately staff the finance department to address this finding. Diop told the board that like the rest of the district, the finance department has had difficulty hiring staff this year to fill its vacancies.
Roethke shared a calendar with the committee for the budget process in the finance department for this year. The district’s annual pro forma financial projection will be shared at the October 19 finance committee meeting. This document typically includes a five-year projection of the district’s financial position, assuming no changes from the status quo.
Jourdain thanked Diop and his team for their work on the pro forma financial projection, noting how important the upcoming pro forma will be for the board as it works on “school transformation” this year. Jourdain expressed frustration with the board at the pace of that work.
“We had a whole year to do something about it and we did not,” Jourdain said. “I’ve been screaming from the rooftops for over a year about [the fiscal crisis]. It doesn’t matter who is on the board, people are just not listening.”
The district will also prepare a strategic operating plan this year, which the district hasn’t previously had. A draft of this plan will be shared with the finance committee at its April 16, 2024 meeting, developed by a committee that hasn’t been formed yet.
Cox reported that the payroll department for the district is now fully staffed, and the district is revising the pay stub for staff to make it easier to understand. According to Cox, the district was able to address most of the payroll complaints mentioned in public comments by explaining the pay stub to employees, rather than actual errors in payments to staff.
Diop explained that the payroll system has not been updated since 2007, and many provisions in contracts with district employees cannot be easily updated in the payroll system. A revised pay stub was shared with union leaders on September 18, and Diop said that the union leaders seemed pleased with the changes. The payroll department should be issuing pay stubs using the revised format by the end of fall. Diop said that the first pay cycle for teachers this school year occurred without any issues.
The finance committee meets again on October 17, at 5 p.m. at the Davis Center. Finance committee meetings are not livestreamed or recorded.
