The Detroit Public Schools board has approved a two-year, $1.1 billion budget plan that includes laying off more than 1,700 employees to stave off a $408 million deficit. The district also is suing to recover at least part of $46 million in alleged inappropriate wire transfers from the Office of Risk Management.
The lawsuit filed Friday in Wayne County Circuit Court asks 13 individuals and contractors to account for the money, which was transferred from 2003-2007. A district investigation last summer concluded there was no documentation for many services. There also may be evidence of overbilling, destroyed documents and kickback payments, according to the lawsuit.
Board members said they gained more clarity on the district's budget proposal after several information sessions in which the administration explained the rationale for the cuts, which are expected to generate more than $520 million in savings.
Though the budget projects a deficit of nearly $105 million in fiscal year 2009, necessitating a state-mandated deficit elimination plan, administrators expect the cost savings measures will yield a fund balance of $2.6 million by fiscal year 2010.
The layoffs of 818 teachers and instructional staff sparked anger by teachers, who booed as the administrators presented the proposal.
The Detroit News, “DPS board cuts 1,700 jobs,” July 1, 2008