Robert C. Bobb, the emergency financial manager of Detroit’s public schools, is gearing up to hold hearings to find out why the beleaguered school district overspent in the millions on real estate deals for its headquarters and a few schools.
An investigation by his inspector general’s office (which includes at least one former FBI agent) found in some cases the district paid up to seven times the appraised value of real estate because of how the transactions were done, The Detroit News reported.
Bobb told me earlier this summer the only good thing that came out of the 1999-2005 state takeover—which he called an “abysmal failure” financially and academically—were the new schools built. And even those were poorly managed, he said.
The district bought five floors of Detroit’s iconic Fisher Building in 2002 as its new headquarters. School officials paid paid $24.1 million for the five floors to a company that paid $2.4 million less for the whole building the year before.
“The more we delve into these contracts, the more we just end up shaking our heads,” John Bell, the district’s inspector general, told The News.
Bobb, who was appointed by Gov. Jennifer M. Granholm in March, is on a one-year contract to clean up the finances of the Motor City’s schools, which are in the hole more than $250 million after seven consecutive years of deficit spending.
A version of this news article first appeared in the District Dossier blog.