State to Review Detroit Schools Finances DEARBORN, MICH. (Michigan Radio) - State Superintendent Mike Flanagan today declared that a serious financial problem exists in the Detroit Public Schools.

That comes as no surprise to people who've been following the news about the troubled school system. But the declaration sets in motion a series of steps that could ultimately lead to a financial takeover of the state's largest school district.

Detroit Public Schools faces a deficit that dwarfs the annual budgets of most Michigan cities.

Its school board just sanctioned the superintendent - who is only a little more than a year into the job. And the district continues to lose students - which in turn means the loss of the state aid that accompanies them.

"I wish the state would take it over, and get these crooks out of here," Clarence Wheeler said as he waited outside Cass Tech High School to pick his granddaughter up from school.

Officials with the state and the school district are quick to point out that there's no way the financial review could result in the kind of takeover the state initiated in 1999.

Steve Wasko is a spokesman for Detroit Public Schools. He says the district looks at the state's involvement as helpful - not punitive.

"We certainly don't view this in any way shape or form as anything that amounts to the previous actions of years back of a takeover," he said. "In fact our understanding based on the state law upon which these actions are being taken, they could not lead to that even if that was the intention, and that isn't the intention."

But the review process could lead to the appointment of a financial manager who would have vast control over key decisions for the district.

Governor Granholm has 30 days to appoint the review team. The team has another 30 days to inspect the district's books.

Once that's completed, the school district could enter into an agreement with the state to correct the problems. Or the state could appoint an emergency financial manager. That person would make all the district's financial decisions - including budgeting, borrowing, and labor negotiations.

Wayne Kuipers is the chairman of the state Senate Education Committee. He's been a vocal critic of the district's financial management. And he says it's time the state steps in.

"You know, we've heard rumors over the years of any number of problems that have gone on, both legal and potentially illegal," said Kuipers. "It's time we get to the bottom, and figure out what's going on so that if there's hope of rebuilding the system that we're able to do that, if there's no hope that we address that situation and maybe start from scratch."

That kind of suggestion is likely to raise fears among some community members who remain suspicious about the state's motivations.

But other people - like Clarence Wheeler - say they're so fed up with the district's financial troubles, they'd welcome state intervention.

"I wish they'd find out whose got the money, and they lock em up, because they need to go to prison," he said. "This is bad. When I was going to school they had money, and now all of a sudden the money just flies out of mid-air. And everybody's lying. And it's really ridiculous. I wish the state would take it over."

Contact Sarah Hulett at sarahhu@umich.edu © Copyright 2009, Michigan Radio