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The Hamtramck School District is bleeding red ink. An audit report, issued at a school board meeting last week, says the district is over this year’s budget by $2.5 million and has nearly extinguished its savings.

Hamtramck School Board President Camille Colatosti attributes the financial fiasco to, of all things, overspending.

“We grossly overspent in capital improvements in the past two years, and the teachers contract is too expensive. It is beyond what the district can afford,” says Colatosti.

Teacher and administrative salaries were $1 million over budget for the 2002-2003 school year, she says. Colatosti would not say whether layoffs will occur.

The school district’s annual budget is $35 million.

“The district would be in debt, but we had savings to cover overspending,” says Colatosti. But the savings has just about disappeared.

The audit confirmed much of what attorney George Ward, conducting a review at the behest of the school board, uncovered earlier this year.

Ward, formerly second in command in the Wayne County Prosecutor’s Office, issued a report alleging that superintendent Paul Stamatakis and the grounds and building director Dennis Thompson spent more than $1 million — much of it through no-bid contracts and change orders — on school maintenance without receiving required board approval.

The new audit also states that Stamatakis is authorized to do wire transfers with school funds, which “violates acceptable accounting standards.” The problem, says Colatosti, is that “there are no checks and balances.”

“I will say at this point that the district needs to do massive restructuring,” says Colatosti. “We will have to re-evaluate everything, including employment on all levels.”

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