CHICAGO — A troubled Michigan school district located in a city only recently freed from state control stepped closer to its own state takeover Friday when a review team announced it has found a financial emergency in the district.
Gov. Rick Snyder appointed the review team in June to investigate the finances of the Benton Harbor Area Schools.
Among other things, the team found that the school district's general fund liabilities totaled $21.4 million, with general fund assets totaling only $5.9 million.
The district was able to trim its general fund deficit to $15.5 million on June 30, 2103, down from $16.1 million as of June 30, 2012, the team said. But the reduction was due largely to a $2 million emergency loan from the state, the team said. "Without the loan, the cumulative general fund deficit would have increased 8.8%, from $16.1 million to $17.5 million," the state said in a press release on the team's findings.
The district also owes more than $3.6 million to various vendors, the state found.
The team will send its report to Snyder, who now has 10 days under state law to consider whether to affirm the financial emergency and take action.
The district is located in Benton Harbor in southwest Michigan. The city was under state control for four years until March, when Snyder announced the financial emergency was officially over. The state set up a four-member transition board to oversee the city for a period of time.
