LANSING, Mich. (WLNS) – Hundreds of thousands of unexplained dollars uncovered in an audit of Potterville Public Schools’ budget earlier this month are likely the result of “sloppy bookkeeping,” interim Superintendent Sam Sinicropi told 6 News in a phone interview.

“I don’t think any money was stolen,” says Sinicropi. “I don’t think it did. I think we had messy accounting. Expenses that weren’t — weren’t — a big picture of what we were spending.”

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

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

That reduction puts the district at risk for state oversight. Michigan law requires a school district’s fund balance to be 5% or more of the budget. The audit found the district was at less than 1% of the budget. Oversight could result in additional oversight by Treasury and education officials and potentially, although unlikely, a takeover by state agencies.

The budget was drawn up in accordance with an agreement with Rehmann. In addition to preparing the budget, the company was also expected to monitor budget expenditures and deposits. The company received between $12,000 and $15,000 a month for these services, Sinicropi said.

The contract with Rehmann was winding down after the board of education voted in May to end the deal. The company was expected to continue providing services to help with the audit and once the audit was complete, Sinicropi says, the contract was over.

A spokesperson for Rehmann sent a statement to 6 News.

“Due to client confidentiality, Rehmann cannot comment on the work we have done for Potterville Schools,” the emailed statement said. “Rehmann is committed to ensuring integrity and transparency in every business-to-customer transaction, and we deny all allegations of wrongdoing. We are relentlessly committed to maintaining the highest level of professional and ethical standards and to following industry guidelines in all aspects of our work.”

Stacy Ann Sipes, president 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 activity was meant to train the business manager to oversee the budget. Operations 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 any in-depth training from Rehmann.

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

“I am still employed by the district. I’m on non-disciplinary administrative leave,” Baker told 6 News. She went on leave on or around August 20, she says.

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

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

The other reason the contract was terminated, Sipes told 6 News, was the result of a budgeting error in the 2023-2024 budget. That error counted a $450,000 grant twice, creating a $450,000 budget hole. The board in December adopted 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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