EAA (Update: Pretty Soon we'll be talking Real-Money to Experiment!)

Michigan’s Education Achievement Authority adopts $92.2M budget

By Chastity Pratt Dawsey Detroit Free Press Education Writer

   The state’s reform district expects to have more money next school year because of an infusion of federal grants, freeing up cash for athletics and vocational programs, officials said Tuesday.

   The board of directors for the Education Achievement Authority of Michigan adopted a $92.2-million general fund budget for the 2012-13 fiscal year during a meeting at Wayne County Community College.

   The EAA, which was established in 2011 to take over and turn around schools that perform among the lowest 5% in the state, took over 15 schools last year that were formerly part of Detroit Public Schools.

   Overall, EAA spending will increase by 4% — about $3.7 million or an estimated $1,400 per student — due in large part to increased Title I federal grants for programs for low-income students, said Harry Pianko, the EAA’s deputy chancellor for business, fiscal affairs and operations.

   For 2013-14, the EAA will receive about $13.6 million in Title I grants, an increase of about $7 million.

   Other highlights of the EAA budget:

   The EAA had about 8,021 students last school year and expects to drop to about 7,419 in the 12 schools it runs directly. The EAA has chartered three of its schools, which are expected to enroll about 1,500 students who are not factored into the EAA budget. The charter schools are separate financial entities and pay the EAA a 3% administration fee.

   The athletics budget will increase from about $451,000 to $1 million. Funding for vocational education will increase from $306,554 to $1.9 million.

   A few weeks ago, the EAA’s foundation, the Michigan Education Excellence Foundation, announced it had secured $59 million in donations. But those are mostly multiyear pledges and should not be reflected in the budget, Pianko said.

   “We didn’t want to rely on private donations,” Pianko said, “because there’s no firm commitment or dollar amount.”

   The EAA budget includes $1.5 million in gifts and donations. The budget anticipates a similar amount — $1.9 million

   — in reserves will be left over at the end of the 2013-14 school year.

   During the 2012-13 school year, the EAA’s first year operating schools, the system experienced financial struggles in part because it had expected — but later learned it was not entitled to — about $18 million in Title I federal grants. As a result, the EAA received a $2-million advance from the state and took out $11.1 million in loans with help from the DPS. The EAA paid off the final $5.1 million in loans early, though it was due in July, officials said.