05/01/2012 03:34 pm ET

Pontiac School District Finances To Be Reviewed By Michigan Department Of Education

The Pontiac school district took a step this week that may put the school system on the road to a state-appointed emergency manager.

The Michigan Department of Education will launch a preliminary financial review, the first step under the emergency manager appointment process outlined in Public Act 4.

The district has a $24.5 million deficit, and the MDE withheld its $1.25 million monthly state aid payment in April, according to the Oakland Press.

MDE spokeswoman Jan Ellis said the state is required by law to withhold payment until an approved Deficit Elimination Plan is in place.

According to MLive, Interim Superintendent Dr. Walter Burt said the money, which has not yet been released, was withheld because the state questioned the progress the district has made on cutting its budget.

"Additional measures will be implemented within the next week to reduce the deficit," Burt said in a statement. "We are very confident that by the end of June 2013, we will have exceeded our targeted goals."

The district conditionally approved a plan last year that calls for nearly $27 million in cuts over three years and more than $15 million in reductions by June. According to Ellis, so far the district has not been able to implement all of the steps in its original plan.

"We will be working closely with the district on the preliminary review," Ellis said.

Last month, the district announced layoffs for 95 employees, including 43 teachers.

According to WXYZ, the teacher's union president, Aimee McKeever, said teachers are willing to make concessions.

The state has intervened in several other school districts struggling with massive deficits. Last month, Muskegon Heights became the third school district to receive an emergency manager, after Highland Park Schools and Detroit Public Schools.