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Board debates shifting fund-balance metric to revenues; trustees question adequacy
Summary
The Tecumseh Public Schools board discussed a proposal to measure its 12% unassigned general fund target as a share of unrestricted revenues (not expenditures) to align with state reporting. Trustees asked for more analysis on months-of-coverage and additional controls; the board approved keeping the current auditor for one more year amid calls to bid the work.
The Tecumseh Public Schools Board of Education spent a large portion of its July 13 meeting debating whether to change policy 3202 so the district's 12% general-fund target would be measured against estimated unrestricted revenues rather than estimated expenditures.
Superintendent (speaking to the board) said the change would align the district's policy with how the state reports fund balance and provide consistency for public reporting. He told trustees the committee's draft wording would set the board's goal as "an annual unassigned general fund balance of at least 12% of estimated revenues," and noted staff recommended using "unrestricted" revenue language to avoid counting restricted, grant-funded dollars.
Trustees pressed for practical context. "So when you say revenue, is that all revenue, or is it unrestricted funds?" one trustee asked, arguing there is a large difference between restricted and unrestricted dollars. Other trustees said the change could make the district's numbers appear stronger without actually increasing financial resiliency and asked how many months of operations 12% would cover. The superintendent said the board would continue to update the budget and the policy as revenue forecasts change.
Trustees suggested additional guardrails: stronger internal controls, clearer reporting visuals for the board, and possible supplemental metrics that express liquidity in months rather than a single percentage. The board did not adopt the policy language at the meeting; the superintendent said he would take notes back to committee for further work.
Related to the district's financial oversight, the board discussed the annual auditor appointment. The superintendent recommended continuing Manor Castarian as the district auditor. One trustee recalled shortcomings during last fall's year-end work and urged the board to consider soliciting bids; others said the auditing team had changed and recommended giving the firm another year to complete the transition. The board moved to appoint Manor Castarian to perform the annual audit; the motion passed on a roll-call vote with all present voting aye.
The meeting closed the discussion by directing further committee-level follow-up to define how the revised policy would report both percentage and practical coverage for board and public clarity.
