Potterville's budget problems stem from 'messy accounting,' says interim superintendent

LANSING, Mich. (WLNS) – Hundreds of thousands of unaccounted dollars uncovered during an audit of the Potterville Public Schools budget earlier this month are likely the result of “messy accounting,” interim Sam Sinicropi tells 6 News in a telephone interview.

“I don’t think any money was stolen,” Sinicropi said. “I don’t think so. I think we had messy accounting. Spending that didn’t have a lot of oversight on what we were spending was not the case.”

He says the board revised their budget in June. That budget concluded that the fund balance — essentially the difference between the district’s revenues and expenses — would be approximately $750,000.

“You just look at it and see what the difference is. At the time, Potterville Schools had a fund balance of approximately $750,000,” he told 6 News. “So that means we got more, more came in than we spent. When the auditors checked, it turned out to be $750,000; it was $71,000.”

This reduction puts the district at risk of state oversight. Michigan law requires that a school district’s fund balance be 5% or more of its budget. The audit found the district was at less than 1% of its budget. Oversight could lead to additional scrutiny by Treasury and Education officials and possibly, though unlikely, a takeover by state authorities.

The budget has been drawn up in the context of a contract with Rehmann. In addition to preparing the budget, the company was also expected to monitor budget expenditure and deposits. The company was paid between $12,000 and $15,000 per month for these services, Sinicropi said.

Rehmann’s contract expired after the Board of Education voted to terminate the deal in May. The company was expected to continue providing services to assist with the audit, and once the audit was completed, Sinicropi says, the contract was over.

A spokesperson for Rehmann sent 6 News a statement.

“Due to client confidentiality, Rehmann cannot comment on the work we did for Potterville Schools,” the emailed statement read. “Rehmann is committed to ensuring integrity and transparency in every transaction between firm and client, and we deny any allegations of impropriety. We are relentlessly committed to maintaining the highest level of professional and ethical standards and following industry guidelines in all aspects of our work.”

Stacy Ann Sipes, chair of the Potterville Public Schools Board of Education, tells 6 News the May decision to end the relationship with Rehmann was two-fold. She says the company had to train the business manager to oversee the budget. The manager is Monica Baker.

“I never touched the budget, I just presented the budget,” says Monica Baker. She also tells 6 News that she never received in-depth training from Rehmann.

Potterville officials have repeatedly declined to discuss Baker’s employment status with the school district. However, Baker confirmed with 6 News that she is on paid leave.

“I am still an employee of the district. I am on non-disciplinary administrative leave,” Baker told 6 News. She was placed on leave on or around Aug. 20, she said.

She says the reason she was given the paid leave was “there was a cyber attack on my computer.”

Both Sinicropi and Sipes declined to comment on Baker’s employment status with the district.

The second reason the contract was terminated, Sipes tells 6 News, was due to a budgeting error in the 2023-2024 budget. This error caused a $450,000 grant to be counted twice, leaving a $450,000 budget gap. The board in December approved a plan presented by Baker to cut the district’s budget by 15%.

Sipes says the contractual relationship dates back to 2019.

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