THE AUDITOR'S WORDS: NOT MINE.
Dearest readers, Lady Budgetdown has spent enough time in Bay City Public Schools' ledgers to find something that deserves more than a passing glance.
In the district's 2024–25 independent financial audit, the auditors wrote:
"The School District was lacking proper board oversight throughout the year."
Yes. You read that correctly.
And this was not a brand-new finding. The underlying issue was identified as 2025-002 - Repeat Finding 2024-002 and classified by the auditors as a material weakness in internal control.
What happened?
According to the auditors, monthly financial reports and disbursement listings were posted on the district website, but the Board was not provided the necessary link to access them, and those records were not posted timely enough for Board members to review them before monthly meetings.
Why does that matter?
Because while this was happening, the financial picture was changing rather dramatically.
🪶 FACT #1 - THE GENERAL FUND BALANCE IS FALLING
June 30, 2024: $14.50 million
June 30, 2025 actual: $9.51 million
June 30, 2026 projected: $6.75 million
June 30, 2027 projected: $6.17 million
If the current budgets play out approximately as projected, that's a decline of roughly $8.33 million or 57% in three years.
In FY2024-25 alone, the General Fund declined by approximately $5 million.
🪶 FACT #2 - MORE REVENUE, BUT ANOTHER PROJECTED DEFICIT
When Bay City adopted its original FY2025-26 budget, it anticipated approximately $83.28 million in General Fund revenue.
The final budget now anticipates approximately $88.88 million, roughly $5.6 million more revenue than originally projected.
And yet the district still projects approximately a $2.75 million deficit for the year.
That would leave the General Fund at approximately $6.75 million, or 7.37% of expenditures.
🪶 FACT #3 - ENROLLMENT HAS CHANGED THE EQUATION
The district itself acknowledges declining student enrollment as one of the financial realities it must address and says staffing, facilities and programming must be aligned with its long-term financial strategy.
Our earlier review of Michigan School Data found Bay City's student count declined approximately 26.1% over ten years, while total staff FTE declined approximately 10.1%.
That does not, by itself, prove the district is overstaffed.
But when enrollment falls substantially faster than staffing while the district simultaneously runs operating deficits and draws down reserves, it creates a perfectly reasonable question:
Has the district's cost structure adjusted quickly enough to the number of students it now serves?
And that brings Lady Budgetdown right back to the headline.
The independent auditors didn't say the Board disagreed about finances.
They didn't say trustees simply needed more information.
They wrote:
"THE SCHOOL DISTRICT WAS LACKING PROPER BOARD OVERSIGHT THROUGHOUT THE YEAR."
And the finding was a repeat from the previous year.
For fairness, the district says changes have since been made: check-register totals are now provided directly on meeting agendas and links to the detailed information will be emphasized regularly.
Also important: the district received a clean opinion on its financial statements, and the auditors reported no instances of noncompliance required to be reported under Government Auditing Standards.
Lady Budgetdown isn't interested in making the audit say something it doesn't.
But neither should anyone make it say less than it does.
When reserves are declining, deficits are continuing, enrollment has fallen substantially, and the independent auditor identifies a repeat material weakness involving Board financial oversight, that deserves the public's attention.
No accusation required.
The ledger, and in this case, the auditor can speak for themselves.
🪶 With receipts and respect,
Lady Budgetdown