Warning signs about the Minneapolis Public Schools senior finance officer, Ibrahima Diop, had been accumulating for months: IRS penalties, a mysterious deficit in the district’s healthcare trust account, a blistering outside audit that referred to the department’s “pervasive fear and uncertainty,” two reprimands and a performance improvement plan.
Diop remained in his job until Jan. 2, by which time he’d resigned to take a job in Milwaukee. He had been the district’s top financial official for nearly a decade.
Days later, the district filed a police report related to “wire fraud,” though no names appear on the report and the district won’t explain it. State law limits the information the district can release about former employees.
The Reformer has filed multiple public records requests since first learning the district’s three top finance leaders were declared “out of the office indefinitely” early this year. The district hasn’t responded to a number of those requests — including two dating back to January.
Diop didn’t respond to a request for comment.
Public records obtained by the Reformer — personnel records, investigative reports, invoices, emails, a police report and other documents — paint a picture of a chaotic department, and a district slow to respond.
The finance department’s personnel problems have accompanied fiscal instability. The district has had to talk to both bond counsel and credit rating agencies about the recent, unexpected decline in its fund balance, the administration told a school board committee this week.
The district is facing a $50 million deficit, roughly 7% of its operating budget, brought on by decades of declining enrollment — and the state and local funding tied to it — as well as increasing labor costs, all while the district continues to operate the same number of school buildings it has for decades.
This year the district is eliminating hundreds of school-based support staff, including school counselors, social workers and librarians, primarily in schools that serve its students in most need of extra support. At the same time, it 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.
District Superintendent Lisa Sayles-Adams, who took the helm in February 2024, has not publicly addressed why she allowed Diop to remain in his job through the turmoil and has declined repeated interview requests. The district says it will not be doing interviews on these topics because of the “substantial amount of not public and private data involved.”
In a statement to the Reformer, Sayles-Adams said, “I was hired as the superintendent during a pivotal time that required getting reacclimated with the district, listening and taking a data-driven approach to understand where the district has been and where we need to go.”
She continued: “As superintendent, it is my responsibility to make hard decisions that are guided by fairness and driven by data. Certain processes take time to complete and it is paramount to have a solid understanding of what has taken place.”
Issues emerge in late 2024
At the end of 2024, two unrelated incidents started a chain of events that led to the departure of the finance department’s leadership a year later.
In late November, two district employees, whose names are redacted in an investigative report, began holding back a portion of regular monthly bank transfers into a healthcare trust account. In total, the employees would withhold nearly $3 million before they were stopped ten months later, as the Reformer recently reported. The report does not explain why the employees did this.
A few days after the first funds were withheld, Diop forwarded an email from one employee to another employee that included “private personnel data” about the original sender, according to records obtained by the Reformer. The district investigated the incident, and determined he had also failed to complete annual compliance training two years in a row.
Sayles-Adams issued a written reprimand to Diop in May 2025 for violating the Minnesota Data Practices Act because of the forwarded email.
Around the same time as the reprimand, a human resources department employee became aware that the district was withholding the healthcare money. The withheld funds included both employees’ and employer’s contributions to health insurance premiums. Because the district self-insures, money from that account is used to pay health care claims, which is why the fund is supposed to be walled off to prevent raiding for other uses.
That same month, the district hired Sepler and Associates to conduct a review of the climate and culture in the finance department.
The HR department employee, whose name is redacted in records obtained by the Reformer through a public records request, continued to investigate the withheld funds into June. At one point the employee consulted with both the district’s actuary, who determines the amount of the monthly payments to the trust account, and Darcy Hitesman, an attorney who specializes in this type of trust account.
“Because this was a busy time of year for the (HR) Department, [redacted] informed the Investigators that the plan was to push the issue until August,” according to a heavily redacted copy of the investigation report written by the law firm Greene Espel.
Meanwhile, Tariro Chapinduka started as the executive director of finance on July 1, 2025. Chapinduka is one of the only district employees whose name is undredacted in the Greene Espel report. He had previously worked for the district in 2017 when he was supposed to create the health care trust account. According to the investigation, however, he never filed the appropriate paperwork to establish the trust with the IRS. This missing paperwork is not the reason for the tax penalties, according to the district. Chapinduka’s employment ended on Feb. 17 of this year.
Issues escalated as school year started
On Aug. 13, 2025, Sepler & Associates shared its report on the finance department’s climate and culture. The report describes the department as at a breaking point.
“The Finance Division is characterized by poor morale, a lack of collaborative ethos, pervasive fear and uncertainty, and leadership gaps. Incremental improvements are not likely to overtake the rate of decline in organizational health,” Sepler & Associates wrote.
By Aug. 18, 2025, concern about the withheld trust account payments was growing, according to Greene and Espel. The investigation details the range of shifting explanations about why the funds were withheld and where the funds wound up. One possibility: A response to a directive from an unnamed district official to “assess indirect costs to reduce the budget gap.”
Diop was again reprimanded at the end of August and given a “final warning,” citing insubordination for not completing the tasks assigned in the May written reprimand and “continued performance concerns.” This reprimand noted a performance improvement plan and “inability to provide accurate budget and costing information.”
District takes action to end withholding and investigate
Sayles-Adams is first mentioned in the Greene and Espel investigation report’s timeline on Sept. 5, 2025, about four months after the HR employee became aware of the healthcare trust account issue. The report states that at some point the general counsel and an employee whose name is redacted elevated their concerns to Sayles-Adams, but it does not give a date.
On Sept. 5, the superintendent directed employees to stop withholding funds from the healthcare trust account. And on Sept. 8, she told an employee whose name is redacted to transfer the accumulated withheld funds, approximately $3 million in total, into the healthcare trust account.
Sayles-Adams first learned in September 2025 that the district had been assessed tax penalties by the IRS but she did not know the reasons for the penalties or the amount at the time, according to a statement from the district. The school board was not notified until January 2026 about tax penalties, when Sayles-Adams learned the amount: $2.9 million for errors calculating and reporting employment taxes and another $2.3 million for late filing of Forms W-2 and Forms 1095-C. The tax penalties had accumulated since 2023.
(Further tax penalties were assessed in April 2026, and the district has not said whether the underlying issues have been resolved to prevent additional penalties.)
Senior finance officers remains with the district through the fall
Diop remained in his job through the fall — as Greene Espel conducted the investigation — overseeing the development of the district’s five-year budget projection, and the district’s annual audit. In school board meetings, he assured the board and public numerous times the audit would be completed on time, and would show the district in compliance with the school board’s policy to retain reserves of at least 8% of its operating expenses.
In December 2025, Diop presented the five-year financial projections at six community meetings.
Diop’s resignation was announced to district staff on December 19, 2025. According to news reports, he was hired on Dec. 18 by Milwaukee Public Schools. The job offer was rescinded after the Reformer reported on Jan. 6 that he and two other employees were placed on leave.
On Jan. 5, the district filed a police report related to potential wire fraud that had taken place around Nov. 12, 2024. Emails discovered by Greene Espel investigators discussed withholding funds from the healthcare trust around this same time. The police report offers scant details and the investigation remains open. The police report was first reported by Sahan Journal.
Consequences become apparent in early 2026
Much of what Diop told the public during his last months on the job proved to be incorrect.
The district reported in Feb. that its budget deficit for next year will be over $50 million, or $20 million more than estimated in the five-year budget projection in October. The larger deficit means even more cuts to services for students than expected last fall.
The annual financial audit arrived Apr. 14, more than three months after the state’s Dec. 31 deadline. Instead of $140 million in general fund balance, the audit showed the general fund balance was $112 million at the start of the current fiscal year. The general fund balance is one measure of the district’s financial reserves and an indicator of its financial health.
The audit also revealed a number of issues, including a lack of segregation of duties in the district’s accounting department. Segregation of duties is important to prevent fraud and errors in record keeping.
The audit also showed the district is out of compliance with the board’s unassigned fund balance policy, a key to maintaining the district’s financial health. At the school board’s finance committee meeting this week, the district said it will transfer about $3.6 million from its general fund to its reserves to regain compliance with board policy.
The bad news has often been delivered by Kara Lundin, an employee of the Center for Effective School Operations who is serving as senior finance officer until a permanent employee can be hired. The district is paying the firm $68,865 per month for Lundin and half a dozen other consultants.
On Apr. 28, Lundin said that the district would reclassify certain special education expenses, which will increase state aid by nearly $11 million this year and next year. She said the maneuver is used by most Minnesota school districts. It is unclear why the district had not been doing so until now, missing out on millions of dollars of special education aid for an unspecified number of years.
The district will also need to transfer $2.5 million to its food service fund from its general fund to cover lost revenue during Operation Metro Surge when many students were afraid to go to school.
Lundin also revealed that the state had asked the district for detailed information about how it plans to address a range of issues identified by district auditors.
This summer, Lundin’s firm will conduct an analysis of finance department operations over sixteen weeks before providing the district with its findings and recommendations. The final report is expected almost two years after district employees began withholding funds from the healthcare trust.
