Hazel Park, Mich. — The Hazel Park School District Board of Education voted Oct. 30 to approve the district's audited financial statements for the year ended June 30, 2025, after an independent audit partner said a modified opinion was issued and that auditors identified a material weakness in internal controls.

Deborah Trevor, the audit partner who presented the report, said the audit covered the district's financial statements for the year ended June 30, 2025, and that auditors "issued a modified opinion on our statement." Trevor told the board auditors had no disagreements with management and completed the work on time, but they reported a material weakness because "books and records for this fiscal year, including bank reconciliations, were not reconciled timely," which required adjustments during the audit.

Why it matters: The auditors' designation of a material weakness indicates deficiencies in internal control that, taken together, could result in a material misstatement of the financial statements if not addressed. Trevor said the audit team proposed two journal entries during fieldwork (state-aid timing and a reversing payroll accrual) that were not material enough to require posting before issuing the statements.

What auditors reported: Trevor reviewed key financial highlights for the general fund, stating cash increased by roughly $6 million compared with the prior year. She said the district paid a $3.1 million loan after year-end, which accounted for part of the cash movement, and that accounts payable rose primarily because of a $3.1 million payable. Auditors also noted roughly $1.6 million in unearned revenue tied to a bus grant and that the district's unrestricted general fund balance rose to about $1.2 million.

Internal controls and IT: Trevor and board members discussed deficiencies in documentation and file access. The auditor repeated recurring recommendations for improved IT environmental controls, off-site backups and a formal disaster-recovery plan. Trevor thanked Monica and Crystal of the district business office for completing audit schedules and said the district and auditors had to work late in the process because initial schedules and trial balances were not ready on day one of fieldwork.

Single audit: Trevor told the board the district's single-audit report was not included with the financial statements in the board packet because the federal compliance supplement had not been issued. "We are about 80% done," she said, and the auditor expects to complete and issue the single audit within 30 days after the federal supplement is published.

Board action: Board member Heidi moved to approve the audit and Nate seconded. A roll-call vote recorded affirmative votes from present members and the motion carried.

Next steps and context: The report recommends management address the timeliness of bank reconciliations and strengthen documentation and file-sharing procedures. Board members and administration discussed bringing cybersecurity and cloud-backup options and cost estimates to the Committee of the Whole for further review before any purchase or contract is approved.