Lawmakers Criticize DPI Superintendent Underly at Hearing

Jill Underly. Photo courtesy of Underly for Wisconsin.

Wisconsin Superintendent Jill Underly faced more criticism from lawmakers on Wednesday as the Joint Legislative Audit Committee reviewed the findings of a financial reporting audit and launched an audit of the agency’s licensing procedures.

During the first three hours of the committee hearing, Underly’s absence was a major discussion point for lawmakers on the committee as they reviewed the financial audit. She has also faced criticism for being absent about two weeks ago at the Assembly Government Oversight Accountability and Transparency committee meeting when she was in Indiana to accept an award.

“This body is extremely disappointed that right now, when we’re going over an audit that probably impacts over $12 billion in what’s spent by our educational legal entities, that Dr. Underly is not joining us,” Rep. Robert Wittke (R-Caledonia) said, adding that the committee provided details on the meeting weeks in advance.

Wittke said Underly is the only agency head who has not come before the committee when it is discussing an audit.

“You don’t get the governor out of every hearing, do you?” Superintendent Deputy State Superintendent Tom McCarthy said. “Dr. Underly is an elected official and has dispatched us to manage parts of these duties, and that is why you have me at these, because she does take it very seriously and is staying deeply briefed.”

“It’s interesting, you say that she’s an elected official, but when I had an audit before us that included the Department of Justice, it appeared that Attorney General [Josh] Kaul could be in front of us and comment on that,” Wittke said. “Constitutionally, she supervises the educational system here, whether elected or not, and… so, I would think that it would be something that she would want to address.”

Wittke quipped that maybe McCarthy should be signing off on the audits instead of Underly.

Sen. Eric Wimberger (R-Oconto) said he found it “very concerning” that Underly was not at the hearing to discuss the first audit and her absence is a sign of “cowardice in a leader.”

“To send the people who work for you in to take heat and not take it yourself would make me have a lack of confidence in my leader. I wouldn’t expect Superintendent Underly to have all the answers. Oftentimes an executive leader does not. They’re managerial… to defer to you to answer is quite different than not being available to be held accountable,” Wimberger said.

The committee launched the audit into the financial reporting and the agency’s process for reviewing audited financial statements following a financial reporting scandal at the Milwaukee Public Schools last year.

MPS faced significant criticism from lawmakers especially as the information came to light shortly after the district passed a $252 million operational referendum.

“The problem was recurring and compounding to a point where DPI was having difficulty appropriating funding accurately. That information was hidden from the public until after MPS convinced voters locally to approve a $200 million referendum,” Wimberger said during the hearing. “I’m sure voters would have had a different opinion of whether MPS needed money if they knew the district was so unaware of their internal finances.”

In accordance with state statute, DPI monitors financial school districts’ financial statements with a requirement that schools submit annually. Schools must contract with a certified public accounting firm, which submits the audited financial statements to DPI.

Financial information from public schools and independent charter schools is required to be submitted by Dec. 15, under DPI policies. Voucher schools are required to submit financial information by Oct. 15 each year.

MPS was a recurrent discussion point during the hearing, though the audit found that MPS is not the only district with difficulties submitting documents on time.

Among schools’ 2022-23 audited financial statements, the Legislative Audit Bureau found that 77% were submitted on time and 22% were submitted late. For school districts that submitted on time, the agency took on average 87 days to complete its review of those audited financial statements.

Of those submitted late, 70% were submitted at least 29 days late.

The audit looked at a sample of 18 school districts that submitted their statements late, finding that the agency contacted those districts 47 days after the Dec. 15, 2023 deadline.

Milwaukee Public Schools’ audits for that year were submitted on Dec. 20, 2024, about a year after the due date — the latest among all 421 school districts.

McCarthy said Milwaukee Public Schools had been historically late in turning in the district’s annual audit, but it typically came with communication about why they were late and a commitment that the district would have the audit submitted in the following weeks.

“That was not a normal year of being late for them,” McCarthy said of December 2023.

When the lateness of the school district’s reports came to public attention, DPI said it had been meeting with MPS quarterly since April 2023, monthly since February 2024, weekly starting in March 15 2024 and then daily in May 2024 to get the district to submit its reports. The agency has since placed the district under two corrective action plans and withheld over $50 million from Milwaukee schools. Gov. Tony Evers has also launched separate audits of the district.

Wimberger expressed concern that MPS was given a “two-year grace period.”

McCarthy said he believed the agency was “pretty strict” with the district.

“If you consider withholding $51 million to be grace, I’ll call you next time we have a problem,” McCarthy said.

“We used the tools and authority that we had at our disposal to compel the district through two separate corrective action plans, stood shoulder to shoulder in trying to clean up some of the local aspects of what’s going on, and I think the current superintendent has been deeply engaged in committing resources and staffing to making sure that this does not happen again,” McCarthy said.

McCarthy said the situation with MPS has been a “long, painful journey that we don’t ever want to repeat with any other district.”

The legislative audit found that DPI does not have a requirement that agency staff contact schools that haven’t submitted financial statements and audits on time.

The Legislative Audit Bureau made 22 recommendations to DPI to improve its processes.

Those recommendations included establishing written policies to require that it contact school districts within one month if their documents aren’t submitted by the deadline and regularly contacting schools until those audits are submitted. It also recommended that the agency establish a written policy that implements a deadline for starting its review of audited financial statements and completing those reviews.

The audit bureau made similar recommendations for DPI in overseeing private voucher schools and for the Department of Administration in overseeing the financial information for independent charter schools.

McCarthy said that the agency is taking the audit bureau’s recommendations into consideration. That includes putting in writing all communication with district administrators and school boards as late reporting occurs.

McCarthy also noted that the agency has launched a school financial transparency dashboard that allows people to “dive in and look at any district” including reviewing records of compliance for reporting.

“I’m glad you’re moving forward to try and crack the systemic problem, in my opinion, that deceived the public in the passing referendums without understanding the true financial situation of their respective district,” Wimberger said.

Licensing and sexual misconduct audit

Underly was present during the latter half of Wednesday’s hearing, testifying on the agency’s licensing policies and changes it plans to make, especially to investigations into educators accused of sexual misconduct and grooming.

“Where were you this morning?” Wimberger asked.

“I was at the DPI,” Underly replied. Wimberger did not push the point.

Underly repeated much of her testimony from the Tuesday Senate Education Committee including laying out some of the steps the agency is taking, launching a new webpage with the list of educators who have surrendered their licenses or had them revoked, as well as the changes she wants to see lawmakers work on, including providing additional resources for the agency’s licensing responsibilities and closing the loophole that allows unlicensed teachers to work in private schools.

The Joint Legislative Audit Committee voted unanimously to launch an audit into DPI’s policies and processes for educational licensure revocation, suspension, restriction and investigation. The audit will look at trends in the DPI’s investigations, its policies and how Wisconsin compares to its midwestern neighbors.

Supt. Underly faces criticism, audits of financial reporting and teacher licensing was originally published by the Wisconsin Examiner.