ELPS Board Hears Presentation on Preliminary Audit

A recent preliminary audit of East Lansing Public Schools showed that there has been some improvement of the district’s net balance and that a safety bond approved by voters in 2024 has helped the district’s finances.

The audit, presented at the Oct. 27 Board of Education meeting, is required under the Single Audit Act of 1984 because the district spent more than $750,000 in federal funds in the last fiscal year. Dave Nielsen from the accounting firm Maner Costerisan reported on the audit.

The district has total assets of more than $189 million, up more than $20 million from last year. Nielsen said this increase was largely due to the safety bond voters approved in 2024.

Nielsen said the district has a negative net balance of approximately $1.7 million, adding that it’s common for Michigan school districts to have more total liabilities than assets.

Many liabilities, like post-employment benefits, are longterm costs. The district’s net position improved by about $9 million over the previous year.

The district’s general fund, where money is more discretionary, ran at about a $1 million deficit last year and had roughly $58 million in expenses. The general fund still holds a fund balance of nearly $15 million, about 26% of its expenses last year. The district’s fund balance is like its savings account, and can cover budgeting shortfalls.

Factors that impact the district’s income include property taxes (18 mills have been levied in recent years), funding the district receives per pupil ($9,608 for the last two fiscal years), and student enrollment (the district gained five students last year after losing 71 the year prior).

The audit also examined funds the district paid out in the last fiscal year. Most numbers were similar to the previous year, with the exception of line items for “business office,” which doubled from $827,000 to $1.6 million, and “operations and maintenance,” which increased by just under $1 million. Nielsen said the business office increase came from a tax charge or abatement.

Moving forward, there are several factors that can affect district’s funding, Nielsen said.

As mentioned before, student enrollment impacts the amount of funding the district receives from the state. The district is predicting an increase of 25 students in 2025–2026.

The district is also likely to receive less money from the state in the form of grants, including funds for mental health provided through Section 31aa, a state funding line created in 2024 “to improve student mental health and student safety,” according to the Michigan Department of Education. The audit report shows those funds are estimated to be reduced by $366,000 in the 2025–2026 fiscal year.

Nielsen ended by saying the “district had excellent fiscal accountability during fiscal year [2024–2025].”

The entire audit report can be accessed here.