Lesson From Court of Appeals: Retain Those ‘Contemporaneously Signed Attendance Records’

Kacie Kefgen

By Kacie Kefgen, MASB Assistant Director of Labor Relations and Legal Services

DashBoard, April 22, 2015

Last week, the Michigan Court of Appeals issued its latest decision in the Galien Township School District’s pupil accounting case, ruling in favor of the Michigan Department of Education and upholding State Superintendent Michael Flanagan’s decision to reclaim about $750,000 in state aid payments from the district. (The Galien case also included a similar appeal from Delton-Kellogg Schools, but the Court of Appeals ruled that Delton-Kellogg had not exhausted its administrative remedies, and the Circuit Court lacked jurisdiction in the case.)

MDE had ordered a field audit of Galien’s pupil membership counts after receiving an anonymous tip that the district had overstated the number of students taking part in an alternative education program for the fall 2010 and spring 2011 counts. MDE sought ‘contemporaneously signed attendance records’ from the district to support the numbers reported for state aid purposes. When Galien could not provide the auditor with the signed records, MDE ordered audits for the 2008-2009 and 2010-2011 counts as well. In the end, MDE deducted nearly 190 FTEs, which could not be verified through signed attendance records or other documentation.

Galien had an early victory in Circuit Court, where Judge Rosemarie Aquilina ruled that MDE exceeded its authority in re-auditing student counts that had been certified. MDE appealed that ruling, and Galien made several arguments in its two rounds of challenges in the Court of Appeals. The Court of Appeals, however, was not persuaded that MDE lacked the authority to order retroactive audits or that the district was denied its due process rights. The Michigan Supreme Court has decided not to hear the case.

Michigan’s Pupil Accounting Manual, which provides MDE guidance on pupil membership requirements and count procedures, can be found here.

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