Milwaukee Public Schools lost $450,000 in a bank impersonation fraud scheme this week when the district was targeted by an external scam.
So far, the school district has recovered $255,000 of that money and is working to trace the remaining $195,000, officials announced in an email on Tuesday.
While MPS officials say they are implementing “short-term and long-term controls to protect the district’s finances,” the fraud comes at a time when the district is facing other dire financial challenges.
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MPS’s overall budget deficit has grown to about $58 million, despite cuts in February to close what was then a $46 million gap.
At the end of October, the MPS Board of School Directors updated its final 2026-27 budget from a spring projection of $1.6 billion in expenses to $1.77 billion.
Superintendent Brenda Cassellius says the deficit is the result of lower student enrollment, an increase in transportation costs amid soaring fuel prices and higher spending on food due to inflation.
This year the district projected 60,277 students, but has an enrollment of 58,088. Falling enrollment translates to a decline in funding.
At the same time, MPS has 145 schools buildings that used to house 100,000 students. Those buildings are aging, underutilized, have deferred maintenance and are not up to date with HVAC and plumbing, Cassellius said.
“We just continue to tighten our belts,” Cassellius said during an interview Wednesday with WPR. “And we continue to look at places where we can create greater efficiencies. Part of that is closing schools, although that doesn’t provide as much relief as I think people think it does.”
Over the next month, the district’s Great Schools Advisory Committee will continue looking at new academic programs, school closures and mergers.
Cassellius has led MPS since March 2025. MPS Superintendent Keith Posley resigned in June 2024 after mismanagement and financial failures were uncovered, leading to outraged residents calling for his ouster.
Cassellius hopeful for change in school funding after Crowley victory
Democrats won both houses of the Wisconsin Legislature for the first time in 18 years and Democratic Milwaukee County Executive David Crowley was elected governor on Tuesday.
Cassellius says what would help MPS and public schools across the state the most is if they were fully funded, particularly special education.
She says if the special education reimbursement would have been 42 percent as promised, instead of 35 percent, the district would have gotten another $36 million this year.
During recent school board meetings, Cassellius warned that the district’s reserve fund is down to $500,000.
Cassellius says common practice for school districts nationwide is to have a reserve of about 5 percent of the budget. That means MPS should have $88.5 million in reserves.
But building up that reserve could also hurt MPS — the school funding formula is based on district spending, enrollment and property values.
“I’m very hopeful that this legislature and governor will take (changing the formula) very seriously and look at the policies behind the formula and fix that so that children will get the resources that they need to have a great education in the state of Wisconsin,” Cassellius said.
Before the election, Cassellius had multiple conversations with Crowley. She says she is excited to work with him.
“Obviously, he has a broader perspective now as he assumes the role of governor and governing can be quite challenging,” she said. “I don’t believe there’s anything more important than investing in our children, and the future of Wisconsin. And I think that he realizes that as a father of three young girls. And I think that he’ll do a great job of setting those priorities for the future of Wisconsin.”
Fraud scheme leads to CFO change
Meanwhile, Cassellius says MPS is continuing to work to get nearly $200,000 back from the bank fraud incident.
The district became aware on Nov. 2 that funds they hold at US Bank were part of bank impersonation fraud perpetrated by an “external party.”
The district notified the FBI, Wisconsin Statewide Intelligence Center, and the Milwaukee Police Department and the Office of Accountability and Efficiency.
During the investigation, Deputy Chief Financial Officer Jennifer Buros will serve as acting CFO.
Aycha Sawa, who has served as chief financial officer since September 2024, is still employed by the district. Cassellius said she could not comment further on personnel matters.
Buros has been the deputy CFO since July. She previously worked at DPI where she oversaw school finance reporting, district auditing and accounting requirements.
Sawa was hired by MPS Chief Financial Officer Martha Kreitzman, who retired immediately after Posley resigned. Comptroller Alfredo Balmaseda was fired the next day.
MPS is not the first school district to be a victim of a bank impersonation scam. In February, Dickinson Public Schools in Oklahoma worked with the FBI to recover nearly $5 million after a similar incident.
Data released by BioCatch in August found 292 financial institutions in the U.S. serving a combined more than 280 million users had attempted impersonation scams. That was more than double than the number in 2026.
“Obviously we fell victim to that,” Cassellius said Wednesday. “It just points out the real seriousness of how sophisticated these actors are in the impersonation.”
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