Auditor gives Appleton Area School District a clean opinion; finds several year‑end adjustments and reports $136M fund balance

CliftonLarsonAllen lead auditor Leah Lasecki presented the Appleton Area School District’s 2023–24 annual audit and told the board the firm issued a clean opinion on the district’s financial statements — the highest level of assurance an external auditor can provide.

Lasecki summarized audit scope and results: the firm performs two separate audits for districts — a financial statement audit and a federal/state single-audit for grant compliance — plus an examination of the district’s Department of Public Instruction (DPI) aid certification. She said the auditors tested major federal programs including the Child Nutrition Cluster, Title I, ESSER and the 21st Century Community Learning Centers grant, and tested state programs including equalization aid and the school‑based mental health grant.

Key findings and adjustments: Lasecki said the audit produced a few findings and material adjustments, none of which changed the audit opinion: - Clean opinion: "We gave you what we call a clean audit opinion," Lasecki said, meaning the auditors do not believe the financial statements are materially misstated. - Finding 2024-001: The auditors prepare the district’s financial statements on the district’s behalf; because the statements are prepared by the auditor rather than the district, the firm reports this as a control finding (a common practice when clients outsource preparation). - Finding 2024-002 (material adjustment): A supplemental pension plan had not been valued under current accounting standards by the prior actuarial provider and required a material adjustment to the district-wide financial statements; auditors recorded and reported the correction. Lasecki said this did not indicate an error in the district’s general ledger but required an annual financial-statement adjustment. - Subscription‑based IT arrangements: The auditors noted about $337,000 of subscription‑style IT contracts that could be recorded as a long‑term liability in district-wide statements; the auditors judged the effort to value these arrangements outweighed the benefit for the district and called it an immaterial unrecorded item.

Compliance and internal controls: Lasecki said auditors identified no internal-control deficiencies over compliance and found no compliance findings for federal and state major programs tested.

Fund balance and financial trends: The audit’s management discussion and analysis (MD&A) shows governmental fund balance as of June 30, 2024, of approximately $136,000,000. Lasecki broke that down: about $35,000,000 is assigned for specific purposes; about $15,000,000 is unassigned (the district’s cash‑flow bucket); the remaining roughly $86,000,000 is restricted or non‑spendable. She noted the unassigned amount sits roughly within the benchmark range of 20–25% of average operating expenditures (about $48–59 million benchmark range), and the district’s unassigned balance of about $50,000,000 is within that guideline.

Capital projects and other items: The capital projects fund balance declined about $26,000,000 year over year as referendum dollars continued to be spent; the auditors proposed a handful of year‑end journal entries that management corrected. Lasecki also pointed to a forthcoming GASB accounting change for compensated absences that will affect district‑wide statements next year.

Board and staff reaction: Board members asked about the implications of the findings for budgeting and cash flow. One board member asked whether the district could afford a $2,000,000 deficit without falling below the 20% unassigned benchmark; the auditor said that amount was reasonable but cautioned about larger deficits. Director of Business Services Holly Burr and staff were commended by the auditor for their work during the audit.

Ending: The audit was presented as an item for the superintendent’s consent agenda; administration recommended approval and will work with auditors on implementation of upcoming GASB standards and any follow-up items.