TR schools making progress with financial corrective actions

By Robert Tomlinson
News Director

THREE RIVERS — Several months after four corrective actions were recommended in their 2023-24 financial audit, Three Rivers Community Schools has reportedly made progress in implementing corrections to its processes.
TRCS Director of Business and Finance Mandi Zaborowski gave TRCS Board of Education members the rundown of how the district’s corrective action plan has been going during their Monday, Aug. 18 meeting.
Two of the four findings were repeat ones from the 2022-23 financial audit, while the other two were new findings from the 2023-24 fiscal year audit. All of the findings came under previous leadership of the business and finance department, as Zaborowski was hired into the district in June 2024, right at the tail end of the 2023-24 fiscal year.
The first finding had to do with recording expenses of federal awards, a repeat finding, which noted that because of management oversight, accounting records with regards to federal awards were initially misstated by “amounts that were material to the financial statements.”
Zaborowski said the corrective action recommended and done by the district was for continuing education, closer monitoring of those financial statements, and an “enhanced” year-end review process. So far, she said she has attended and completed a governmental accounting class, which she passed with an “A” grade; participated in a class on grants for three months, and presented on how to reconcile grants at a Michigan School Business Officials conference.
In addition, Zaborowski said she has a mentor, Nancy Swanson, that has worked well with her so far.
“She was provided to me as a mentor when I started here, and she’s very good. She’s working with me to double-check all of my work and give suggestions as needed,” Zaborowski said.
The second finding, another repeat, had to do with inconsistencies and insufficiencies in documenting time spent on Title I activities, which led to discrepancies in reconciling activity to reported costs, which led to “potential misstatements” in Title I charges. Title I provides supplemental federal financial assistance to school districts for children from low-income families. The audit noted while improvements were made during the latter part of the year, around December 2023, there were still some inconsistencies present.
To correct that, Zaborowski said there are new policies and procedures for personnel activity reports to ensure compliance, including implementing a new reporting system, conducting regular training sessions, and instituting periodic reviews. So far, Zaborowski said this action has produced positive results.
“This is the first year that I have seen since the original Title I audit that we’ve had clean audits for every single draw,” Zaborowski said. “We hire at the very strong request of the State of Michigan a specific auditor that audits every single Title draw I do, and we’ve had three draws, three quarters, and all of those have been perfectly clean for Title I, Title II, Title III and Title IV.”
The first new finding that was addressed had to do with unbudgeted and over-budget expenditures, as there were reportedly instances where expenditures for Title I were either not included in the approved budget or exceeded the approved budget by more than 10 percent without prior approval from the state or federal agencies. If not corrected, the district would most likely be ineligible for reimbursement of funds.
Corrective action on this funding included implementing stronger budgetary controls, including developing standardized budget tracking, conducting quarterly reviews of Title I expenses, and training finance staff on federal budget compliance requirements. Zaborowski said this process involves Superintendent Nikki Nash receiving a packet that includes every single thing paid for that’s been verified. So far, it has worked out well, as Zaborowski said there have not been 10 percent variances in these expenses.
“After I get all that documentation done, I give it to Nikki, she takes a look at it, and she either approves it or talks to me and tells me what she wants changed,” Zaborowski said. “This year, it’s been straight approvals.”
Finally, the last finding had to do with inadequate documentation for reimbursement requests. Attributed to transitions in the business and finance department, documentation confirming reimbursement requests weren’t consistently provided, and a school-prepared expenditure tracking sheet reconciling incurred expenditures with reimbursement requests was not available.
To correct it, the district has implemented a formal review process for federal reimbursement requests, including instituting a tracking system for expenditures, requiring accompanying documentation, and providing training for Zaborowski and other staff on federal documentation standards.
“All of those things have been completed for all of the federal draws that we’ve had this year, and will continue to be completed as long as I’m here,” Zaborowski said.
Board members thanked Zaborowski for her work on the corrective actions.
“Great job, seriously,” Board President Erin Nowak said.