Wayne County audit committee discusses late budget amendment 2024-35302 and potential Public Act 2 violation

The Wayne County Committee on Audit discussed budget adjustment 2024-35302 and possible noncompliance with Public Act 2 of 1968 during a meeting where Auditor General Marcy Cora said the amendment arrived months after the fiscal year closed and could trigger a material noncompliance finding in the county’s 2024 audit.

Cora told the committee she prepared a memo after a February 20 Ways and Means discussion and reviewed state guidance that, in her words, makes clear “there is no authority to amend the budget after year end. Appropriations made after a contract is entered into or funds spent is a violation of the act.” The committee pressed management staff to explain why the adjustment was filed more than four months after the September 30 fiscal year end and what steps will prevent a recurrence.

County finance officials said several operational factors contributed to the late amendment. Yogesh Kisani, deputy chief financial officer for the Department of Management and Budget, described timing features of local accounting practice and a recent technology transition: property-tax collections recorded in October and November (the county’s “60-day” collections) and a 90-day grant-recognition policy permit some revenues to be recognized after Sept. 30, but those practices depend on timely data posting. Kisani said the county went live with a new human capital management system (Oracle) on July 1 and then experienced a cyberattack that disrupted access to historical files used to prepare audit schedules. “And then at the top of that, we hit with a cyberattack. This is where things are kind of falling apart because now you lost the files,” Kisani said.

Deputy budget director Greg McIntyre and Kisani said the combination of delayed grant reimbursements, late property-tax postings, system conversion work and missing files made it difficult to produce accurate year-end accruals. Auditor Cora and others said the result — budget adjustments submitted months after year end — will lead to the same finding auditors reported for the prior fiscal year: costs were incurred before year end but the budget was not amended until afterward. Cora said the Uniform Budget Manual prepared for the Department of Treasury (dated August 20, 2001) supports that position.

Commissioners pressed staff on oversight steps. Committee members and the auditor general discussed reinstating timely quarterly budget projections to Ways and Means and restoring an older practice of quarterly reporting that predates the COVID-19 pandemic. Cora and staff said quarterly reports were required by the county charter and that a budget deficit ordinance passed around 2008 had been used historically to correct deficits during the year; committee members and staff agreed those practices have not been consistently followed in recent years.

Officials described near-term and midterm measures. Kisani said management expects the new HR system to stabilize with a full year of data and described plans to go live with a new financial system on Oct. 1 to improve ledger visibility and analytics. Staff also said they plan to revisit the county’s chargeback model (how internal costs are allocated to business units) and to expand training and change-management work so departments post transactions more promptly. Auditor Cora said she will follow up with the county chief financial officer about restoring timely reports to the commission.

No formal action or vote on the budget adjustment occurred in the committee meeting; the item was discussed and the committee concluded without a motion on this agenda item.