Audit reveals larger deficit

EASTPOINTE, Mich. - An audit shows the East Detroit Public Schools Board of Education did not intentionally adopt a deficit budget for 2009-2010 — which is a violation of state law — but did so because their top officials handled finances so poorly, according to The Macomb Daily.

The current gap between revenue and expenses is $11.5 million, The Daily reported, far higher than the deficit that the district's former finance department officials had reported to the board earlier.

Former Superintendent Bruce Kefgen and two other school officials, all of whom resigned or were fired, were singled out in the forensic audit for such things as failure to reconcile year-end financial statements over the past three years, failure to address the problem of severe overstaffing in the face of a 25 percent drop in enrollment, and failure to report budget problems to the board, The Daily reported.

The audit did not reveal any missing funds, according to The Daily.

School officials said the new finance director, Kate Dankovich, has made numerous process changes, updated accounting manuals and taken other steps to improve the financial reporting, The Daily said.

The Macomb Daily, "Forensic audit shows school officials bungled budget figures," May 16, 2010

Mackinac Center for Public Policy, "A Michigan School Money Primer: Deficits," May 30, 2007