At a board workshop, auditors from Baker Tilly told the West Allis-West Milwaukee School District Board of Education they issued an unmodified opinion on the district's 2023-24 financial statements and found one material weakness tied to the auditors preparing the financial statements.

The unmodified opinion means, the auditors said, that the financial statements "are free of any material misstatement" and include required disclosures and consistent accounting policies. Auditor Michelle Walter, senior manager at Baker Tilly, said, "we issued what is called an unmodified opinion," and that the single material weakness exists because Baker Tilly helped prepare the financial statements and related footnotes.

That material weakness did not translate into program-level compliance problems in the district's federal grant audit (the single audit). Walter and district staff reported the single-audit testing covered Medicaid, Title I and child nutrition programs and produced no compliance findings. As the auditors noted, the district's federal expenditures exceeded the single-audit threshold of $750,000, which triggered the compliance review.

Board and staff highlighted the district's stronger-than-expected general fund results. The district budgeted to add about $2.3 million to its general fund balance but instead added about $4.7 million. District staff reported general-fund revenues ran about $118 million budgeted to roughly $120 million actual, with near-$1.0 million of additional state receipts broken into multiple grant buckets (including common school and mental-health-related grants) and roughly $573,000 of higher interest earnings. The general fund ended the year with about $40.1 million in fund balance; total district fund balance across funds was reported to be about $70 million.

District policy requires at least 20% of the current year's expenditures be held in general-fund balance; staff said the actual position was about 35% of current-year expenditures and about 27% of next year's budget, figures the presenters described as a "very strong" position. Staff also said the board has committed roughly $6.4 million of fund balance to specific purposes (about $700,000 for a computer refresh, about $3.0 million for retiree benefits and about $2.7 million for a compensation model) and that $1.5 million is nonspendable (prepaids) and $709,000 restricted for certain grants.

Walter summarized other fund results: the special-education fund balanced revenues and expenditures at about $18.3 million and ends with a zero fund balance (district transfers cover deficits as required); the food-service fund showed about $4.3 million in revenues against $5.0 million in expenditures and a restricted food-service fund balance; community-service operations increased that fund by about $1.3 million to $7.1 million; capital projects spending lowered that fund largely because of a district office project on 90 Third Street (about a $6.0 million draw); the debt-service fund showed roughly $1.9 million in revenues and a modest increase in fund balance; and the district's smaller funds include a Deeper Learning entity with about $1.0 million and a gift fund of about $1.8 million.

The audit report package the auditors provided included the financial statements (pages 1'2), a separate reporting-and-insights document that outlines audit approach and risk areas, the management representation letter, and the single-audit material. Walter told the board there was an "emphasis of matter" paragraph in the financial statements to reflect a new accounting standard that reclassified the food-service fund from a nonmajor fund to a major fund for presentation purposes; the change was described as a presentation issue rather than an operational change.

On long-term liabilities, auditors and staff discussed pension and OPEB reporting. Walter and staff described the district's Wisconsin Retirement System (WRS) net pension amounts and an OPEB valuation. Staff said the district currently shows about 946 inactive participants included in the OPEB liability versus about 856 active employees, and that the district's OPEB structure shows higher near-term costs from a smaller number of pre-65 participants (about 85 pre-65 participants account for roughly $1.6 million of the annual cost compared with about $1.0 million from about 894 post-65 participants). Staff said the district is in year two of a biennial actuarial study and will engage Belmont this spring for the next valuation.

Walter also explained WRS accounting nuance: employees may elect core or variable funds at the state level and the variable fund can produce large swings; those swings, she said, contribute to volatility reported at the entity level even though the district only records the share required by the accounting standards.

Board members thanked the auditors and staff. Board member Miss Kaiser commented, "Just an amazing job of another year of not having any ... material findings," and Board President Lee closed the workshop with thanks. The only formal board action recorded in the transcript was a voice motion to adjourn, carried by voice vote; the transcript did not record individual board vote tallies.

The auditors and staff said they would continue year-round contact and support between audits and that the district and auditors have worked together since about 2018'2019 on the audit process.