New records reveal another Minneapolis Public Schools’ accounting error — $4.1 million
Minneapolis Public Schools lost out on $4.1 million in state and federal special education aid during the 2025-26 school year due to a district accounting mistake, raising questions about the district’s beleaguered finance office, which has been understaffed and working with outdated technology for years.
The district has not previously disclosed the foul-up, which involved MPS underreporting its special education expenses and subsequently losing out on state and federal reimbursement. The school board was told about the mishap in January. In May, district officials toutednew procedures to increase state and federal special education aid by properly accounting for expenses, without mentioning the lost $4.1 million.
The Reformer uncovered the error through a public records request. The lost funding is roughly enough to pay 35 teachers for a school year.
The accounting error is the third multi-million dollar blunder reported by the Reformer since the abrupt departure of the district’s three top finance leaders in January. Finance department employees — including former Controller Aaron Gilbert — improperly withheld over $3 million from a healthcare trust account, before being ordered to replace the funds. The district also failed to properly file certain federal tax forms, which resulted in fines of over $5.3 million being assessed to the school district starting in 2023.
The district has suffered a collapse in enrollment in the past quarter century — and, thus, state and local funding tied to student population — and is plagued by half-empty school buildings, rising labor costs and a student population with unique challenges. These factors have created a deteriorating fiscal environment.
