MI SB0952

School districts, intermediate school districts, and public school academies are prohibited from adopting or operating under a deficit budget and must not incur operating deficits in any fund during a school fiscal year.

Any school entity with an existing deficit, a deficit in the most recently completed fiscal year, or a budget projecting a deficit must immediately notify the superintendent of public instruction and state treasurer, and submit a preplan financial report within 30 days.

Within 90 days of notification, affected schools must submit an amended budget and deficit elimination plan approved by their board to the superintendent and state treasurer, with copies to intermediate superintendents or authorizing bodies; the superintendent of public instruction may require an academic plan be included.

Schools with deficits unresolved within 5 years must submit an enhanced deficit elimination plan to the state treasurer, which may include mandated financial recovery agreements requiring consultant assistance, financial auditors, and other remedial measures; state treasurer may withhold school aid funds pending compliance.

The department of education must submit annual deficit reports to legislature by March 1 and quarterly interim reports on deficit reduction progress; schools under deficit elimination plans must post plans on their websites and submit monthly monitoring reports on revenues and expenditures.