A plan to change the way money is spent on Minneapolis Public Schools is on hold.

The school district had been poised to launch a new budgeting process this year that would ensure that money follows students with the greatest needs. Now district officials say the controversial move is not happening.

“With all the changes that were happening in the district, we decided we couldn’t implement it. … We are putting it on hold,” said Tammy Fredrickson, the district’s budget director, at a recent budget forum.

The model, called student-based allocation, was supposed to be a fairer and more transparent way to budget $577.9 million in funding for schools with different student populations.

Under the model, the district would assign dollar amounts for various student needs, such as special education or English language instruction. Schools with the largest concentrations of students with those needs would likely receive bigger budgets than schools with fewer of those students.

Parents, particularly those in more affluent southwest Minneapolis schools, were concerned that the student-based allocation would slash their school budgets and cause larger class sizes or the loss of programs like art or band.

The new budgeting process is a key part of the district’s strategic plan, approved in 2014.

It calls for schools to get “base” funding for their enrollment. Then schools would get more funding based on the number of students who qualify for free and reduced lunch, or who need special education services or who have students in gifted and talented programs.

The strategic plan calls for the student-based allocation to be in place by 2020, and a letter from interim Superintendent Michael Goar said it was to be fully implemented by the 2016-17 school year.

But the district had been unable to determine how many dollars to assign to students for those special needs. The district also needs to determine the “base funding” and what programs every school in the district has to offer, such as art, theater or languages.

Rebecca Gagnon, the school board’s finance chairwoman, said she is concerned that many of the necessary decisions have not been made.

“If we are providing a world class education, we have to be able to explain what our [funding] gets people, and what we believe is critical to that education,” Gagnon said.

Ibrahima Diop, the district’s chief financial officer, said the district will begin to determine those key components. “We will use this year to see how we can improve it,” he said.

Audit highlights concerns

Meanwhile, the district is at work on next year’s budget. Schools can expect to receive their 2016-17 budgets in the coming weeks, and district officials are hosting several forums in February to explain the process to parents, teachers and staff.

“The last thing you want to do is budget in isolation,” Diop said.

Next year’s budget is expected to reflect more accurately how much money is spent. Auditors of the 2015 budget found the district was under-budgeting for some expenses and then amending the numbers throughout the year. In 2015, the district ended up spending about $14 million more than it had budgeted.

The auditors found “a lot of things were budgeted at a lower level than you normally spend.” For example, the auditors said their own contract was for $108,000, but the district only budgeted $100,000.

“There is a lot of work that can be done on your budget process so that it’s more detailed and watched more closely,” said Michael Bosl, one of the auditors.

Referendum looms

The upcoming 2016-17 budget will also be the last one to include funds from the voter-approved property tax referendum passed in 2008. About 11 percent of the district’s budget comes the referendum. The district is gearing up to ask voters to approve a new referendum in November.

Board member Nelson Inz said a community group made up of local leaders such as City Council members and residents is raising money for the referendum campaign. District officials are not allowed by law to ask residents to support a referendum.

The group plans to hire a pollster to survey residents on how much they would be willing to pay and what those dollars should fund. In 2008, residents passed a $60 million referendum to lower class sizes, upgrade textbooks and technology and pay for programs to boost math and reading scores.