Taos Municipal Schools wins clean audit but auditors flag cash reconciliations, purchasing and reporting gaps

Taos Municipal Schools received an unmodified (clean) audit opinion for fiscal year 2023–24, but auditors reported multiple findings that the district must correct, the auditor told the school board.

The audit matters surfaced during a presentation by Scott Eliasen of Jaramillo Accounting Group, who reviewed the firm’s required communications and the district’s audit report. Eliasen said the audit opinion on the district’s financial statements was “unmodified,” and he summarized required federal- and state-level compliance work and a set of five findings the auditors reported.

The issues matter because they touch both bookkeeping and state compliance: the auditors described a material adjustment tied to cash that created a material weakness; process faults in purchasing; noncompliance items under the School Personnel Act; travel and lodging charges that exceeded statutory limits; and missing quarterly reports on the district website. Eliasen told the board, “No cash that we’re aware of was missing,” while explaining the material adjustment related to how certain county-held gross receipts bond cash was recorded in the district’s trial balance and financial statements.

The nut graf: a clean audit opinion means the financial statements fairly present the district’s position at year end, but the written findings identify internal control weaknesses and compliance lapses the district must correct to reduce future risk and to meet state audit rules.

Most significant findings

- Cash reconciliations and a material adjustment: Auditors said a count of restricted cash related to a county-issued GRT (gross receipts tax) capital bond was not recorded correctly in initial trial balances, producing a material adjustment and a material-weakness classification. Eliasen described the issue as a reconciliation problem rather than missing cash.

- Procurement and purchase-order controls: The auditors found instances in which purchase orders were created after invoices — a process error that breaches proper purchasing sequence and that the auditors flagged as a significant process deficiency.

- School Personnel Act and employee-related compliance: The audit tested required personnel and benefit items and reported noncompliance instances that the auditors classified as other noncompliance; the district said it has increased training and tightened procedures in response.

- Travel/lodging rates: A sampled lodging claim was higher than statutory limits, producing another noncompliance finding the district must address.

- Required public reporting: Auditors noted required quarterly reports were not posted to the district website as required by state administrative rules.

Board and staff response

Superintendent Antonio Lincoln Jr. and finance staff told the board they have started corrective steps, including additional training for purchasing staff, tighter sign‑off procedures before items reach the board agenda, monthly reconciliations and a more rigorous exit/checkout process for employees so keys and assets are returned. Finance staff also said they are working with the county to better document county‑held, district‑restricted cash so future trial balances reflect those amounts correctly at year end.

Board members pressed for concrete timelines; Eliasen noted that audit findings report conditions that existed at year end but that remediation can be completed before the next audit cycle. The auditors and the finance director said most findings stemmed from process gaps rather than theft or fraud.

What the board voted

The board approved the FY 2023–24 financial audit as presented. The motion to approve was seconded and carried unanimously (Board member King, Secretary Trujillo, Vice President Sprague, President Flores recorded yes votes).

Ending

District leaders said they will return to the board with progress updates and expect some issues to be resolved well before next year’s audit work. The audit includes extensive fund-by-fund schedules (including the district’s ESSER and Title I activity) and recommended corrective actions that staff said they will implement as part of routine year‑end and interim controls.