Dearest reader,
Lady Budgetdown has spent quite a bit of time in Ecorse Public Schools' financial records.
And sometimes the most important part of an audit isn't simply what the auditors find.
It's what happens when they come back the next year. 🪶
So let's make this one easy to follow.
In the 2023–24 audit, auditors identified multiple problems involving Ecorse's financial controls and federal programs.
Among them:
• Material adjustments were needed to the district's financial statements because accounts had not been properly reconciled.
• Payroll testing found employees in the auditors' sample who were not paid at their approved rates, with differences the district could not explain.
• Auditors identified problems with fringe-benefit and retirement costs charged to Title I, resulting in an estimated $74,789 questioned overcharge.
• They also identified a potential $12,878 payroll-tax overcharge involving federal Education Stabilization Fund money.
• There were additional problems involving federal-award reconciliation and internal controls over financial reporting.
These weren't simply Lady Budgetdown questioning numbers in a check register.
These were issues identified by the auditors.
The district submitted corrective-action plans explaining how it intended to address them.
Then the auditors came back for 2024–25.
And this is where the timeline matters.
The new audit reported three material weaknesses.
One involved material audit adjustments because accounts again were not properly reconciled.
Another involved allowable wages, payroll allocation, the district's chart of accounts and budget monitoring.
The third involved an unfavorable budget variance and weaknesses in financial reporting and budget controls.
Perhaps most importantly, the audit's follow-up on previous findings says some of the prior year's problems were only:
"Partially corrected."
And directs readers right back to current-year findings. 71570.pdf
In other words:
2023–24: Auditors find significant financial-control and compliance problems.
⬇️
Ecorse: Corrective action is promised.
⬇️
2024–25: Auditors return.
⬇️
Some previous problems are only partially corrected.
⬇️
Three material weaknesses are reported in the new audit. 71570.pdf
And all of this deserves additional context.
As Lady Budgetdown previously reported, Ecorse remains on Michigan Treasury's Early Warning list.
That doesn't mean every problem is caused by the same thing. It doesn't mean somebody stole money. And it doesn't mean every auditor finding is unusual by itself.
But when auditors identify problems, corrective action is promised, auditors return the following year and report that some issues were only partially corrected while identifying three material weaknesses, the public has every right to pay attention.
One audit gives us a snapshot.
Two audits give us a timeline.
And this timeline says Ecorse's financial-control problems didn't simply disappear when the first audit ended.
Lady Budgetdown will keep following the receipts. 👓🪶
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