Robbinsdale schools looks for cuts to fix $20M error. 2 former St. Paul school employees file lawsuit

November 21, 2024

Minnesota Today

In a recent episode of MPR News, host Phil Picardi discussed a significant financial dilemma facing the Robbinsdale school district—a $20 million budget shortfall arising from a counting error. This episode highlights the critical issues surrounding the district's financial management, as well as a whistleblower lawsuit involving two former employees of the St. Paul School District.

Financial Shortfall in Robbinsdale Schools

Key Details of the Shortfall

Counting Error: The shortfall was caused by staff mistakenly counting a fund twice during the budget process, leading to inflated revenue figures.
Budget Meeting: A town hall was held to address this issue, where Chief Financial Officer Kristen Hohaisl stated the imperative to devise a plan to rectify the deficit.
Rebuilding Opportunity: Hohaisl expressed optimism that these challenges could be leveraged for transformative growth, emphasizing the chance to rebuild the district's financial processes.

Next Steps for the District

State Submission: The school district must submit a detailed plan to the state outlining how it intends to address the budget shortfall.
Difficult Cuts Ahead: Leaders are indicating that budget cuts will be necessary to align spending with actual funds available.

Whistleblower Lawsuit in St. Paul School District

Background of the Case

Lawsuit Filed: Two former employees, Marie Schruel and Curtis Mahaney, have filed a lawsuit against the St. Paul School District, alleging wrongful termination after raising concerns about financial practices.
Financial Concerns Raised: The plaintiffs claim that district leaders engaged in a deceptive financial practice, termed a "shell game"—shuffling funds without transparency.

Allegations Against the District

Misuse of COVID Relief Funds: The lawsuit also alleges violations regarding the proper usage of federal COVID relief money, claiming it was improperly applied to cover budget deficits.
Whistleblower Protection Violations: Both Schruel and Mahaney assert that their termination violated laws designed to protect whistleblowers from retaliation.

Response from the District

Lack of Comment on Litigation: The St. Paul School District has declined to comment on the ongoing legal proceedings but stated that previous audits reported a clean financial standing.

Implications for Schools in Minnesota

Financial Accountability

Need for Transparency: These events underscore the necessity for financial transparency and accountability in educational institutions to prevent mismanagement and instill trust among stakeholders.
Whistleblower Protections: The lawsuit highlights the critical importance of safeguarding employees who raise alarms about financial misconduct, ensuring they can do so without fear of retaliation.

Recommendations for School Districts

Regular Audits: Regular financial audits and transparent budgeting processes should be encouraged across school districts to avoid similar situations.
Training for Staff: Providing training for staff regarding financial management and ethical practices can help prevent errors that lead to significant budget shortfalls.

Conclusion

The Robbinsdale school district’s unforeseen $20 million budget shortfall, coupled with whistleblower allegations by former St. Paul employees, sheds light on crucial issues facing educational institutions in managing finances effectively and ethically. As districts navigate these challenges, the emphasis on financial integrity, transparency, and the protection of whistleblowers must remain at the forefront to foster accountability and trust within the educational system.

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