Milwaukee Public Schools’ audit advisory committee, which has reviewed the district’s 2024-25 audit and deficit, noted improvements in the district’s financial processes at its April 16 meeting. It also reviewed the sources of the $46 million deficit from the district’s 2024-25 budget.  

Among the strides MPS has made in the past year in its financial reporting are completing three annual financial audits in the span of just more than one year. In the 2024-25 work completed in January, however, external auditors identified that the district ended that school year with a $46 million deficit.  

The audit advisory committee is made up of five voting members: one MPS Board member and four audit professionals from outside MPS. The Board member currently is President Missy Zombor. 

Improved Time-frame 

Auditors at CliftonLarsonAllen noted significant improvement in both the audit and the district’s annual financial report: Each was completed more than six months earlier than the prior year’s documents.  

Auditors identified progress on past findings as well as more specific work needed on financial controls, timely submissions, and accurate data. One step to address remaining issues is building a new system of accounts within MPS that “talks” to the state’s financial system.  

That new “chart of accounts” is expected to go live in 2026-27. With this in place, the district will be able to identify specific issues earlier and resolve them.   

Single Audit Improvement 

Auditors also identified improvement in the “single audit,” which includes grant-funded costs.  

A number of the district’s past issues have been fully resolved, and other findings are reduced in severity. The district will continue to address issues that remain, including special education cost documentation.  

Analysis of Deficit 

The Office of Accountability and Efficiency presented an analysis of the district’s $46 million deficit from the 2024-25 budget year that reinforced the administration’s earlier findings for the shortfall: underbudgeting in salaries, benefits, and transportation costs. 

MPS also experienced higher-than-expected expenses in construction and capital projects, including substantial expenses to stabilize lead paint in schools.  

Addressing the Issues  

The district is strengthening connections between Finance and Human Resources systems to ensure personnel expenses are properly budgeted both at a district and school level.  

The district also is implementing proper controls to prevent overspending and a regular process to match expenses against revenues throughout the year so any gaps are identified and promptly addressed.  

MPS already has put in place stronger processes to identify and regularly stabilize lead paint issues.  

MPS is fully up to date with its annual external audits filed with the state. Having the 2024-25 audit completed as the district builds its next budget is a necessary step that had not taken place in recent years. 

The district is committed to building a balanced budget for 2026-27, as required by law. The district has reduced non-classroom positions so it can both address the deficit and redirect resources to classrooms, including more classroom teachers and paraprofessionals. Updates will be posted to the MPS budget planning web page, which includes estimated new savings and revenue and new expenses.