BENTON HARBOR, Mich. (Michigan News Source) – In November, Benton Harbor Area Schools will be seven years removed from being under state oversight.
Yet the district has continued to have significant accounting deficiencies, according to its independent auditor.
The “financial emergency.”
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From 2014 to 2018, the school district was under a consent agreement with the state of Michigan to address a “financial emergency.”
The state of Michigan forgave $10.3 million in debt Benton Harbor schools owed the state in loans in December 2023, according to the Citizens Research Council of Michigan.
But according to audits from as far back as 2016 to the most recent one in 2024, the school district struggles with proper accounting of its revenues.
Hungerford Nichols is the district’s accounting firm.
Hungerford Nichols noted in the 2024 audit: “During our audit we noted that multiple departments had material actual expenditures in excess of the amounts appropriated. … During the audit, material adjustments were required to correct misstatements in both the School District’s financial statements and the SEFA [Schedule of Expenditures of Federal Awards]. These adjustments included correcting general ledger balances and updating SEFA amounts to align with the School District’s actual expenditure records. The audit team identified significant discrepancies that required external assistance to rectify.”
The district agreed with the auditor’s 2024 criticism and stated it would have the issues fixed by June 2025.The district did not respond to an email from Michigan News Source.
Similar audits in 2016, 2017, 2018 and 2019 on Benton Harbor schools noted similar problems with managing federal dollars properly. Those audits are no longer available on the school district’s website.
“Significant delays.”
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In 2022, the auditor stated, “The District did not record expenditures to the 2020-21 or 2021-22 grants in a timely manner, and internal controls over expenditures charged were not in place throughout the period during which such charges were incurred.”
It continues, “The lack of preparedness by, monitoring, and communication from the Business Office as well as significant delays in providing requested financial information and supporting schedules caused significant delays in allowing the audit to commence timely. As such, we experienced difficulties in performing and completing the audit for the year ended June 30, 2022.”