Unredacted report offers fresh details on problems in Minneapolis Public Schools’ finance office

Newly unredacted portions of an investigative report indicate Minneapolis Public Schools’ top accountant, Aaron Gilbert, decided on her own to improperly withhold $3 million in payments to a health care trust account. 

“In sum, the evidence points to Ms. Gilbert as the decisionmaker,” reads the report from the law firm Greene Espel. The report also says she was “evasive during her interview and generally did not come off as a credible witness.”

Gilbert did not respond to a voicemail or text messages. According to the district, Gilbert’s last day of employment was May 14.

The improper withholding, the discovery of which coincided with the departure of senior finance leadership, is among a raft of problems that beset the beleaguered district’s finance office during the past two years. The school district was also assessed millions in fines by the IRS for late filings, as first reported in the Reformer in April. 

The district eventually transferred the full amount of withheld funds, plus interest, to the retiree health care trust account, ten months after the unusual transactions began. When Gilbert made this transfer, she directed a series of additional financial transactions involving the district’s investment account and some of its bond proceeds. These transactions were never explained to investigators, and did not appear to be necessary.

“This series of transactions suggests that Ms. Gilbert had an intent to deceive,” the report says.

In June, the school board approved a budget for the upcoming school year that included $39 million in cuts. This is the third year in a row the district has had to make significant cuts to staff and programming since pandemic-era federal aid expired. The district has lost around 20% of its enrollment in recent years — and the state and local funding tied to it — while labor costs are increasing, and is continuing to operate the same number of school buildings it has for decades. 

The new budget eliminated hundreds of school-based support staff, including school counselors, social workers and librarians, primarily in schools that serve students most in need of extra support. At the same time, the district is increasing the number of elementary teachers in order to meet class size caps that were negotiated as part of its contract with its teachers’ union.

The district recently released new portions of the investigative report in response to a series of public records requests submitted by the Reformer in April. The Reformer still has more than a dozen records requests pending with the district, with at least one dating back to February.

The district’s lack of internal financial controls facilitated Gilbert’s actions. Typically, processes within a finance department would prevent the same person from recording expenses and revenue, and making payments. Conventional procedures would also require multiple people to authorize payments. 

The district’s annual audit — presented to and approved by the school board every year — has warned about a lack of appropriate internal controls for over a decade. The district has never had enough staff to fully segregate its accounting functions, in part because of its chronic budget deficits. 

The district’s external auditor told the Green Espel investigators that given the lack of segregation of accounting functions “someone would have the ability to implement the 5% (health care trust) withholding decision without approval. The Investigators’ review of the pertinent facts confirms this,” the report says.

In November 2024, emails show Gilbert sought authorization to make the routine transfer to the healthcare trust for 95% of the typical monthly payment, but she never received authorization. The name of the authorizer is redacted. Without receiving a response, Gilbert directed another employee, whose name is also redacted, to make the reduced payment. The same thing happened in December of 2024 — a reduced payment to the healthcare trust without a response from the authorizer. 

In the first six months of 2025, Gilbert received authorization to make the reduced payment. In July 2025, she made the reduced payment without authorization.

The district’s general counsel and superintendent became aware of the withheld funding in August 2025, after a human resources department employee noticed the unusual transactions in May 2025, and eventually escalated their concerns.

The investigators could not determine whether district funds had been misused, even after hiring a forensic accountant. The external auditor told the investigators that the annual financial audit would not have detected the withheld payments. The district told the Reformer in April that it had not discovered any misuse of funds in its own internal review.

Since January, Minneapolis Public Schools has been paying the Center for Effective School Operations over $68,000 per month to augment staffing in the district’s finance department. CESO is part of Colorfuel, whose CEO is Stephanie Burrage, Minnesota’s former chief equity officer under Gov. Tim Walz.

The district told the Reformer in April it has new procedures for wire transfers that involve four separate individuals, but no new staff to address the lack of segregation of duties cited in the audit.

On January 2, Minneapolis Public Schools informed finance department employees that Gilbert, Senior Finance Officer Ibrahima Diop and Executive Director of Finance Tariro Chapinduka would not be reporting to work indefinitely. 

Diop’s last date of employment was January 30, and Chapinduka’s last day of employment was February 17. 

The Reformer reached out to Diop and Chapinduka. Diop’s voicemail box was full. Chapinduka could not be reached for comment. 

In a recent Star Tribune column, Chapinduka told Evan Ramstad that he was given the option of resigning but refused. “I said, ‘Resign for what?’ Because I didn’t do anything wrong.” He had arrived at the district after the improper withholding began. 

Diop resigned to take a job in Milwaukee that was later rescinded after the Reformer’s reporting about troubles in the finance department. 

Ramstad writes that Diop was a successful leader during his decade with Minneapolis Public Schools. When he started in 2015, the district was facing a budget deficit and depleted reserves, which Diop helped turn around. Recent revelations by the district, Ramstad writes, “bore the look of a manufactured campaign to distract from the pain that’s coming” this fall when the district will propose a restructuring plan that will likely include closing or consolidating some of its schools.

Diop told Ramstad he would like his “reputation back.”