School district applies for $15.5 million state loan to pay bills

The Hamtramck Public School District is seeking a $15.5 million state loan just in case there is a cash-flow problem that will lead to payless paydays for district employees. File photo

By Charles Sercombe
The Hamtramck Public School District has run into a financial crunch.
At last week’s monthly Board of Education meeting, Interim Superintendent James Larson-Shidler said the district may need to apply for a $15.5 million loan to be able to keep up with payroll and to pay other bills.
The district has not received monthly financial payments from the state for the past three months, and it’s now to the point where it’s not possible to make payments on anything this month.
The root of the problem is that the district missed its Nov. 1 state deadline to submit the district’s yearly audit report.
As of last week, the audit was not completed, Larson-Shidler said, but he expects it to be submitted to the state by no later than March.
“I thought we’d be done by February,” he continued. “It does not look like that. In order to be cautious and have cash flow, I would like to get a state aid note so we can operate, and then we could get the audit done.”
As for the delay, Larson blamed it on staffing changes, retirements and an unexpected key resignation.
“There’s some internal controls that we’re working through,” Larson said, in a lengthy explanation.
“I mean, you know, these are excuses, but I mean whenever you get new people in, you know you have to get into the processes and you have to have those internal controls where everybody’s doing their job and all the information comes into accounting and then they can do the books.
“So it takes everybody in the district to be doing their job in order for this information to be coming through,” he added.
Asked what “corrective action” will be taken, Larson-Shidler, who is also the district’s Finance Director, said:
“That’s training, yeah, definitely training.”
The district won’t have to dip into the state loan if the audit is completed and approved by the state within the next few weeks. Once the state approves the audit, money will flow to the district, including reimbursing the missed payments from the past three months.
This is not the first time the district has gotten into a similar financial jam.
Larson-Shidler said the district ran into the same problem, submitting the district audit late, the prior year.
At that time, the district didn’t need a loan. That’s because the district was still cash-rich from a prior federal covid grant to make needed building improvements.
“Last year you had construction funds, so we had a large fund balance,” Larson-Shidler said.
Board Vice-President Mortadha Obaid took issue with the board not being informed earlier about the financial development. Shidler agreed to keep the board informed.
At press time Thursday, a special meeting was called for the school board at 4 p.m. The Review went to press before that meeting, but prior to that meeting sources told The Review that the loan request ran into trouble, and the district will have to come up with another plan to prevent payless paydays.
Prior to coming to Hamtramck’s district, Larson-Shidler came from the Birmingham Public School District, where he was Assistant Superintendent of Finance. He left that district when a controversy erupted over facing a sudden $14-million deficit.
There was plenty of finger-pointing over whose fault it was for the unexpected deficit, and Larson-Shidler ended up taking an unexplained leave of absence, and then eventually resigned, according to media reports.
Larson-Shidler is interim superintendent because the district’s superintendent, Jaleelah Ahmed, was placed in a paid suspension, which she has been on for the past two years.
The school board has never fully explained why Ahmed is suspended. In the meanwhile, she has been collecting her salary of $224,000 a year. This is the final year of her contract with the district.
Posted Feb. 13, 2026