The School Finance Fixer Comes to MPS

Todd Gray. Photo provided.

The Milwaukee School Board was left with a huge hole in leadership.

On May 23, 2024, the Wisconsin Department of Public Instruction told the Milwaukee Public Schools (MPS) that it would consider withholding special education funding because of missing budget reporting data. MPS Superintendent Keith P. Posley, who board members saw as responsible for the problem, soon resigned, followed by the departure of the system’s chief financial officer and comptroller. The school board scrambled to find new leadership.

Eduardo Galvan, an MPS regional superintendent, was chosen to fill the void. This past Friday, the board selected Galvan to be interim superintendent, a role he may hold for most of the next school year while the school board conducts a national search for a permanent superintendent. The fact that the board went internally for an interim superintendent may signal that the board is more interested in stability than wholesale changes at this time.

However, the board went the other way with their pick for interim chief financial officer: Todd Gray is an outsider who has a reputation for solving financial problems in several Wisconsin school districts.

Gray got his start as an accounting teacher and athletic coach at Wilmot Union High School in Kenosha County beginning in 1977. He left education in 1983 to work for a private accounting company, but in 1989, he returned to education as assistant superintendent in financial areas for the Oshkosh and then Appleton school district.

He was surprised when Waukesha hired him as superintendent in 2008 as he had never served in the position, he told Urban Milwaukee in an interview. But he quickly found out why his financial background was a deciding factor.

Waukesha, along with the Whitefish Bay, West Allis–West Milwaukee, Kenosha and Kimberly districts, were talked into a sure-fire way of making money. All they had to do was to borrow money at a low rate, invest it, and within a couple years, cash in for huge profits. “A month after I got there,” says Todd, “we got a notice that our investments worth nothing, zero, and the banks wanted their money.”

“There were times where we had to do short-term cashflow borrowing,” says Todd. “Banks would not deal with us. We had to go spend tens of thousands of dollars with national law firms to get some kind of insurance documentation that we would be able to pay back the short-term debt.”

The five school districts ultimately convinced courts that the investments were misrepresented. “It was an eight-year process,” Todd recalls. “We recovered the $65 million plus [most of the] attorney’s fees.”

After retiring from Waukesha in 2020, Gray went back the private sector as a senior consultant von Briesen & Roper. But the public sector came back calling. He was asked to be a part-time superintendent for the Palmyra-Eagle school district, which faced huge financial problem because some 40% of its 1,000 students were open enrolling to other districts. The school board asked the state to dissolve the district; the state said no. Todd had to put the district on a stronger financial footing and find ways to keep students from leaving the district. Todd believes some reforms he instituted has helped turn the district around and keep it operating.

“Most of my career has been financial in school districts, he notes. “I can’t say I’m a real strong curriculum administrator. I never really had to do much with that.” Yet he pushed for a Montessori school and daycare center in Palmyra-Eagle to help increase enrollment.

No sooner was he done at Palmyra-Eagle then he was asked to help out at Glendale-River Hills. The combined school district’s board president Danielle Bailey wrote this explanation of its problems to the community on March 22, 2024: “In January, the board learned that there were significant errors in accounting and budgeting made by staff that are now no longer with the district, and that our revenue and savings would be insufficient to cover the expected deficit in the 2024-25 budget.”

The district’s business manager and the superintendent resigned and Gray was brought in as a financial consultant. “They overspent their budget two years in a row because the business manager was not accurately managing the budget,” he notes.

Gray continued as a consultant role until the Glendale-River Hills district hired a qualified business manager who could manage the situation without Gray’s help. That freed Gray up to begin work with MPS at the end of May.

“When I got the original call [from MPS], I didn’t know the total scope of the issues,” he notes. “I really didn’t know until I got in here and working through some things, the holes in the organizational chart that we began filling in the last couple of weeks. And then they asked me to fill in as interim CFO [chief financial officer] which is more than just working on the corrective action. It’s also covering the day-to-day… I thought it would be a good challenge.”

The main problem Gray sees is that DPI changed the reporting system by instituting a new automated reporting system that linked smoothly for many but not all school districts in the state.

“It can talk to most of the school district accounting systems in the state,” Gray explains. “Unfortunately, Milwaukee’s, along with some other district systems, did not talk to the DPI system.” For a year or two MPS tried to use intermediating programing, he notes. “To be honest, MPS should have been getting different software or reprograming the software which is now in progress.”

“I don’t blame DPI” for the problem, he adds. “I like what they did.”

But Gray, who has seen a wide range of financial problems at school districts, defends MPS in other areas of budgeting. “There is a lot of piling on, a lot of misinformation” about MPS, he says. “In terms of money disappearing or that type of thing, I haven’t seen any of that.”

“I think you have good people on the board of education who want the district to do well, and that is something I appreciate.”

Gray makes no apologies for defending MPS. “I come from a conservative background,” he notes, adding that his son worked as director of policy for Vice President Mike Pence during the presidency of Donald Trump. In fact, Gray was criticized for bringing Pence and U.S. Secretary of Education Betsy DeVos to a Waukesha school when he was superintendent.

“But I don’t bring politics into it,” he says of his financial consulting work. It’s all about the numbers adding up, and that’s the sort of problem he has fixed many times