Controversies Pertinent to the Minneapolis Public Schools Finance Division
On November 2024, Director and again in December Minneapolis Public Schools (MPS) Finance Division Director of Finance/Controller Aaron Gilbert sought and gained authorization from Senior Finance Officer Ibrahima Diop to transfer 95% of monthly deposits a health care account, VEBA (Voluntary Employees Benefits Association.t hat amounted to $3,000,000 ($3 million). Gilbert similarly received authorization to make the same 95% in transfers from January 2025 through June 2026. In July 2025, Gilbert made the same transfer without authorization.
These actions eventually were interpreted in such a way as to cause concern in the MPS Superintendent Lisa Sayles-Adams Administration and attract much press attention, chiefly from the Minnesota Reformer and the Minnesota Star Tribune.
In May 2025, an official in the Minneapolis Public Schools Human Resources Division, who would report to Senior Human Resources Officer Alicia Miller (and may have been Miller) noticed the transfers made by Gilbert. The Human Resources employee began to investigate the transfers through the following month (June 2025), consulting along the way with the Minneapolis Public Schools actuary, and an attorney, Darcy Hitesman, who includes in her expertise the sort of financial transfers that Gilbert was making. By 18 August 2025, officials within the Minneapolis Public Schools with knowledge of the transfers were expressing deep concern.
On 12 May 2025, the same month in which the Human Resources official noticed the transfers and started to investigate, Ibrahima Diop received a reprimand from Sayles-Adams pertinent to Minnesota Data Practices Act; evidence from an email exchange indicates that Diop had made comments regarding personnel that violated the act. The reprimand also asserted that Diop had failed to participate in compliance training. Sayles-Adams’s reprimand seemingly was done without knowledge of the transfers being made by Gilbert, and without any information from the investigating Human Resources official: External investigations indicate that the superintendent would not become privy to the transfers until late August2025 or early September 2025.
In the eventful May 2025, the Sayles-Adams administration also hired Sepler and Associates (for a payment of $29,000) to investigate the culture and climate in the MPS Finance Division; the report would not be issued until August 2025.
In 25 August 2025 Diop received a second reprimand and “final warning” from Sayles-Adams, with critical comments expressing “continuing performance concerns” on the part of Diop and citing an “inability to provide accurate budgeting and costing information.”
On 5 September 2025, Sayles-Adams directed employees to stop withholding 5% of funds for deposit to the healthcare accounts; three days later, on 8 September 2025, the superintendent ordered that the previous withheld funds be returned to the health care accounts.
In the same month, the law firm Greene-Espel was hired to investigate the matter of the transfers. When the report from the firm was issued several months later, Green-Espel said that investigators could not determine if misuse of funds had occurred; MPS officials also could find no evidence of misuse of funds.
Also in September 2025, Superintendent Sayles-Adams learned of IRS tax penalties that the district had incurred. The penalties totaled $5.2 million: $2.9 million for errors in calculation and reporting employee taxes and $2.3 million for late filing of W-2 and 1095-C forms). In April 2026, more penalties would be assessed.
In November 2025, officials at the Minneapolis Public Schools filed a police report indicating that “wire fraud” had occurred within the district. But at this point, Gilber, Diop, and Chapinduka (a former Finance official who had rejoined the district only on 1 July 2025) remained in their jobs.
In fact, in December 2025 Diop led six community meetings in which he gave five-year projections, including a forecasted $20 million deficit for fiscal year 2027; but by February 2026, by which time Diop no longer held his position, updated revenue and expenditure data would bring the deficit figure to $50 million.
On 18 December 2025 Diop accepted a job in the Milwaukee Public School District as an assistant superintendent and the next day (19 December) announced his resignation.
Then came an odd series of exchanges between Sayles-Adams and Diop:
On 2 January 2026, Diop received an email from Sayles-Adams conveying that he was henceforth “discharged from employment” at the Minneapolis Public Schools. Twelve days later (14 January) came another email conveying to Diop that “I have accepted your resignation” (effective 30 January).
On 2 January 2026, notice went out that Gilbert, Diop, and Chapinduka had been suspended indefinitely. 30 January 2026 was Diop’s last day as an employee of the Minneapolis Public Schools; 17 February 2026 was the last day for Chapinduka. Gilbert, whose withholding of the 5% ($3 million) of funds from the health care accounts had caused much of the controversy regarding the Finance Division at the Minneapolis Public Schools, continued on the district payroll until 14 May 2026.
In January 2026, officials at the Minneapolis Public Schools signed a contract with the Center for Effective School Operations (CESO) at $68,865 per month to manage and assess operations within the Finance Division of the Minneapolis Public Schools. Signatories on this contract was Senior Executive Officer Ryan Strack (for the Minneapolis Public Schools) and Vice President/Finance Dee Dee Kahring (for the Center for Effective School Operations [CESO]). CESO official Kara Lundin led the ($68,865 per month) investigation and management of the Finance Division.
By 28 April Lundin had worked with officials in the MPS Department of Special Education to recode special education expenses according to prevailing regulations so as to garner $11 million in increased special education funding.
In 4 April the completed audit revealed $112 million (not $140 million as the Finance Division had previously indicated) to be in the unassigned fund balance; this placed the amount in the fund to be less than the 8% stipulated by MPS Board of Education of Education rules; the Board approved an additional $3.6 million for deposit in the unassigned fund balance, so as to meet the 8% standard.
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The following contracts have been signed by Minneapolis Public Schools officials (mostly Senior Human Resources Officer Alicia Miller and Senior Executive Officer Ryan Strack) with senior officers of the Center for Effective School Operations (CESO) >>>>>
Transportation Contract, 28 October 2025 through 31 January 2026
>>>>> $!40,406.25
Transportation Contract, 14 November 2025 through 30 June 2026
>>>>> $82,500.00
Data Extraction and Costing Model Customization Training and Support,
14 July 2025 through 30 June 2026
>>>>> $45,500.00
Executive consulting support for MPS Human Services at a rate of $195 per hour for an amount not to exceed
>>>>> $45,000.00
These figures total
>>>>> $312,906.25
The Lisa Sayles-Adams administration has also signed contract with CESO to provide support for the Finance Division; the contract extends from 20 January 2026 through 20 January 2027, with payment given as $68,865 per month. For the twelve-month period, this would total
>>>>> $826,380.00
Additional work may also be provided at a rate of $195 per hour.
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Thus,
Total expenditure for contracts concluded by June 2026 was
>>>>> $312,906.25
Total expenditure for support to the Finance Division when the contract concludes in 20 January 2027 will be
>>>>> $826,380.00
These figures total $1,139,286.25
The contract with the law firm Greene-Espel (to investigate the health care account transfers) totaled $120,000.
The contract with Sepler Associates to investigate and assess climate and culture in the Finance Division totaled $29,000.
Thie brings total expenditures for external contract services related to the Minneapolis Public Schools Finance Division to
>>>>> $1,288,286.25 <<<<<<<
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Thus, the Lisa Sayles-Adams Administration has committed to paying $1,288,286.25 for services related to the Minneapolis Public Schools Finance Division. Then majority of payments have or will go to the Center for Effective School Operations.
By July 2026, some of those who have followed activity of the Minneapolis Public Schools for many years were questioning the wisdom and motivation for these payments and for what they deemed unfair innuendo cast upon Aaron Gilbert, Ibrahima Diop, and Tariro Chapinduka:
Investment banker Sara Spafford Freeman told Minneapolis Star Tribune reported Anthony Lonetree that she believes the district has “thrown longtime employees under the bus and probably ruined their careers with innuendo about wrongdoing. Noting that there is no evidence that the $3 million went missing, she comments also that the district’s ability properly to track nearly one billion dollars in transactions per year, she says that “Every third party who’s reviewed MPS finances--- from auditors to investigators--- has said throughout the Lisa Sayles-Adams’s time as superintendent that the district lacks the financial controls necessary for managing an organization of its size. The Board of Education has heard this finding for years.”
Similarly with regard to treatment of longtime finance officials at the Minneapolis Public Schools, retired MPS principal Jim Clark told Lonetree that he considers the finance division’s issues to be partly to staffing cuts, a consequence of the district’s failure to address a glut of underutilized school buildings that added to the financial burden of the district.
“They’ve been talking about the need to close some of the smaller schools and never done it,” Clark told Lonetree. “They take money where they need to take it, and the departments suffer.” Of Diop, Clark said, he “was so trusted by everyone who knew him. If you’d talk to all the principals, they’d say he was a good man; he knew what he was doing.”
And former MPS Board of Education member Jenny Arneson, a former Minneapolis school board told Lonetree that Diop excelled, even though his team lacked the “segregation of duties” that ensures no one staff member is likely to contravene proper procedures.
Of the former MPS Senior Finance Officer, Arneson said, “I have always thought highly of Mr. Diop, and it wasn’t just me. He and his team were recognized nationally while I was on the board, and our credit rating was high. We had relatively positive audits, although they always suggested we further segregate duties, which I understood to be difficult given the department’s limited resources.”
These sentiments resonate with an article (13 June 2026) written by Star Tribune business columnist Evan Ramstad. Writing that “A hasty, messy removal of three finance leaders at the start of the year has turned into what appears to be a deflection effort” constituting “the strange ouster of Minneapolis school finance officials at a critical time.”
Ramstad, after reviewing the evidence and interviewing Ibrahima Diop, writes,
“To me, it’s an unfair ending to the tenure of the second most-powerful administrator in Minneapolis schools and two others caught in the maelstrom. Diop until then had a solid public reputation. After landing at a district with enormous competitive pressures and declining enrollment in 2015, Diop restored MPS’ bond rating, boosted its budget reserves and navigated a deficit two years later that foreshadowed the one it now faces. He won a national award as top CFO among big-city schools in 2022.”
