CHICAGO - Michigan's treasurer will launch reviews into 16 school districts under a new early-warning system that gives the treasurer power to oversee struggling districts.
All 16 districts have had deficits for five years or more. That's one of the new triggers for transferring a district to treasurer control. The list includes Detroit Public Schools.
The Legislature passed the law in June as part of an effort to gain control over the rising number of local schools that face financial problems. Gov. Rick Snyder signed it into law in July.
The state has a total of 38 districts that have a deficit. That's down from more than 50 last year, according to the education department.
Under the new law, the state treasurer will launch a financial review of the 16 districts and ask them to submit new deficit elimination plans. The treasurer also has the ability to declare a financial emergency and recommend an emergency manager.
Three of the 16 districts, including Detroit, are already under state-controlled emergency management.
The law also shifts oversight of districts with deficit elimination plans to the treasurer from the state education superintendent. Under the bills, either the treasurer or state superintendent can now determine whether probable fiscal stress exists at the district, bypassing the previous process of appointing a review team.
The law also gives the state the power to withhold state aid payments to districts that have deficits until they comply with state-approved deficit elimination plans.
The legislation also created so-called enhanced deficit elimination plans, which would include assistance and guidance from treasury, as well as the appointment of an auditor or inspector to review the plan and the treasurer to set a timeline for the plan.
