Two L’Anse Creuse school board members want to fire the district’s auditing firm for failing to detect millions of dollars in lost revenue and unexpected expenses that left the school community in a budget deficit.

Trustees Shane Sellers and Sandra Hernden say they are not comfortable in continuing to work with the accounting firm following the discovery of a budget shortfall of $7.6 million this winter.

“I am not in favor of bringing them back,” Sellers said at last week’s Committee of the Whole meeting.

Hernden agreed.

“We paid over $11,000 and look where we are at,” she said. “They missed some important things.”

Yeo & Yeo CPAs and Auditors is a Saginaw-headquartered CPA firm with nine offices in Michigan. It reportedly ranks among the top 200 accounting firms in the United States.

Jennifer Watkins, a principal at Yeo & Yeo, last week declined to comment on the situation.

The Michigan Department of Education requires public school districts to undergo annual audits. Officials say a financial audit examines a district’s financial records, transactions and internal controls to identify any irregularities or lack of compliance.

L’Anse Creuse, like most other districts, routinely advertises requests for proposals on services such as auditing. Board members said they already had planned to seek bids from other auditing firms in an effort to keep costs in check.

Sharon Ross, the school board secretary, said there were several financial circumstances that resulted in the budget shortfall, which she says were not the fault of the auditing firm. She said the foundation allowance or per-pupil funds from the state appears to be a contributing factor to the district’s dilemma.

“Yeo & Yeo didn’t do anything wrong,” she said.

School administrators have said a combination of expenses coming in higher than expected, along with revenue not meeting its forecasted levels, caused the budget deficit.

School officials said they expected expenses to be higher than revenue by about $3 million, but the actual deficit was more than twice that amount. Board members anticipate reducing the shortfall by taking money from the district’s fund balance for this year. However, they say structural changes must be made so the deficit doesn’t become a recurring event.

Critics of Yeo & Yeo said the firm should have been able to track trends relating to the district’s financial books that would have provided a warning.

Some board members say the district should have a forensic audit — a more detailed examination of the district’s financial records used to uncover criminal behavior such as fraud or embezzlement — should be conducted.

Earlier this year, Sellers filed a report with the Clinton Township Police Department and sent a letter asking the Macomb County Prosecutor’s Office for a review of L’Anse Creuse’s finances. The police department reportedly is conducting an investigation, which could be forwarded to the prosecutor’s office for additional review, Sellers added, saying he made the request in the interest of transparency. He said it will be important to have “a different set of eyes looking at the books.”

“My concern is, regardless of the entity that looks at our books, I believe it’s important that we do get some type of forensic audit or third party from the outside, and not our current auditing firm,” he said.

“I think it’s best for our community so that they know we are not trying to hide anything.”