MPS committee hears plan to close encumbrances, tightens procurement reviews after $52M data error
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Summary
Milwaukee Public Schools administrators told the accountability and finance committee they reduced open encumbrances by tens of millions, will review encumbrances quarterly and lower the PO review threshold — and flagged a $52.1 million keying error in Fund 80 that staff said relates to a past project, not new operating authority.
Milwaukee Public Schools officials told the Committee on Accountability, Finance and Personnel that a district review of open contracts and purchase orders is closing longstanding encumbrances and tightening procurement controls — a cleanup they said is intended to reduce risk and improve budget visibility.
"We have closed 1,400 contracts and purchase orders, which has reduced our overall encumbrance by over $80,000,000," said Janina Domczyk, director of procurement and risk management. She told the committee the contract review of 11,662 open encumbrances will continue through June and the district will review encumbrances every three months going forward.
Ayesha Sava, the district’s chief financial officer, described updates to monthly revenue and expenditures reporting and said the finance team is improving grant claiming cadence and working with other departments to reconcile carryforwards so the working budget better reflects available authority.
Committee members pressed for plain‑English explanations of technical terms. Janina Domczyk explained an encumbrance is a committed amount tied to a contract (for example, a $100,000 contract that spent $75,000 leaves a $25,000 encumbrance until the contract is closed).
Administration also proposed several operational changes to strengthen oversight: lowering the purchase‑order review threshold from $10,000 to $2,500 to capture smaller IT and other purchases, instituting unit‑rate analyses and issuing RFPs for commonly used services to standardize pricing. Domczyk said procurement and risk teams will provide training for principals and bookkeepers on the new processes.
The presentation flagged a $52,100,000 adjustment in Fund 80 that staff said resulted from a keying error tied to a previously authorized community‑center project. "That was keyed in incorrectly," the budget team said; staff emphasized they will follow up with a full accounting and ensure policy‑compliant approvals are evident to the board.
Committee members asked how the encumbrance cleanup affects the district’s reported working budget and operating deficit; Matt Chiesen of the Office of Accountability and Efficiency told the committee the district ended FY '25 with an approximate $46,000,000 deficit in Fund 10, and the encumbrance work increases visibility into that risk.
Director Zombor moved to approve the administration’s recommendation to authorize purchases and accept the monthly finance matters report; the motion passed on a 5‑0 roll call (Directors Herndon, Jackson, Reza, Zombor and Chair Halloran voted aye).
Administration said it will return with additional accounting detail on the Fund 80 adjustment and the policy citations the committee requested. Staff also said they are building a database to track internship participants for multiple years and continuing to tighten procurement controls and training.
The committee treated this as an actionable item and voted to approve the administration’s recommendation.
