LANSING, Mich. (Michigan News Source) – At a time when Democrats are clamoring for more financial transparency from charter schools, the Michigan Department of Education (MDE) has pulled down some financial information on traditional school districts.
There are more than a half dozen bills that have been introduced by Democrats this week that are asking for laws to require charter schools to provide more financial data on operations.
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However, the state’s education department put out a memo in 2020 that it was no longer keeping district’s audited reports on its website.
“Due to changes in the state of Michigan’s data systems, the state can no longer continue to host district financial audits on the MDE website,” the Oct. 15, 2020 memo stated.
What happened to the website?
The site where the school district financial data used to be stored by the MDE now comes back with a page error. The MDE didn’t respond to an email from Michigan News Source about this situation.
School financial data can be very complicated and confusing. The state does provide a lot of raw financial data on school districts.
But what it stopped hosting on its websites were Annual Comprehensive Financial Reports, which provide far more insight than just the data.
What do these reports find?
The Annual Comprehensive Financial Reports audits are done by third-party accountants and sometimes contain damning commentary by accounting experts.
For instance, from 2011 to 2014, the accounting firm that handled the Benton Harbor Area Schools’ finances stated that in 2011 and 2012, district officials could not tell auditors how much cash they had on hand.
“There was no person available in the Business Office with the skills and knowledge to apply governmental auditing standards in recording the entity’s financial transactions or preparing its financial statements,” Benton Harbor schools’ independent auditor wrote in the 2014 Annual Comprehensive Financial Report.
These audits also contained insightful analysis, such as descriptions of the legislative attempts over the years to reform the Michigan Public Schools Employees’ Retirement System.
Individual school districts must now post reports.
The MDE reminded school districts that the state was supposed to post their Annual Comprehensive Financial Reports on their own website.
And almost all of them do. But some times these audited reports are not posted in a timely manner or in a way that a citizen can see past years.
For example, Flint Community Schools has only the 2022-23 audited report available on its website that was released Oct. 30, 2023.
Benton Harbor schools posted its last two audited reports from 2021-22 and 2022-23, which was released on Nov. 1, 2023.
Benton Harbor’s 2023 audited report offers an insight into the accounting issues within the district.
“During our audit we noted that multiple departments had material actual expenditures in excess of the amounts appropriated,” the auditor’s stated in the report. “Budget amendments within the general fund were not sufficient to cover the actual expenditures.”
“We recommend that the School District perform a detailed analysis of actual expenditures for each special revenue fund, at a minimum by department, throughout the year and, as it becomes known that budgeted expenditures are no longer realistic, that the Board take action to amend the budget(s) accordingly,” the auditor continued.
But with only two years of audits provided, it would require more work to find out how long this had been going on.
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