Manchester School District accepts unmodified FY24 audit; auditors flag missing written Title I allocation method

The Manchester School District Board of Trustees accepted an unmodified audit opinion for the fiscal year ended June 30, 2024, while auditors reported a federal-compliance finding that the district did not have a written methodology for allocating state and local funds to Title I programs, district officials said at a special meeting.

The finding was described by Cheryl Pratt of Plaza and Sanderson, the firm that conducted the audit, who told trustees the firm issued an unmodified opinion on the district’s basic financial statements and found no material weaknesses, no significant deficiencies and no material noncompliance with state or federal law. "You did receive an unmodified opinion on your financial statements with no material weaknesses, no significant deficiencies, and no material noncompliance with state or federal law," Pratt said during her presentation.

Pratt said the district received and expended just over $62,000,000 in federal funds during FY24; the auditors tested roughly $9,600,000 in Title I funds, about $1,600,000 in 21st Century grants, and approximately $37,600,000 in COVID-relief funds. The single compliance finding related to a new testing requirement in the Office of Management and Budget’s compliance supplement: the auditors were required to test whether the district had a written methodology to demonstrate that Title I funds are used to supplement, not supplant, other funding.

"We had to write the district up for that lack of formal documentation," Pratt said. The audit includes a corrective action plan that will be submitted with the report to the federal clearinghouse; Pratt said the district expects to complete the written procedure by March 31. "We have worked with our Title I manager, Polly Golden, and she's written a procedure. We have reviewed it, but we're just putting some final adjustments to that plan. And we do have, expect to have that done by March 31," a district staff member said.

Board members pressed for practical implications of the missing written procedure. A district staff member identified in the meeting as Mr. Francis explained the risk: if the federal government determined the district could not demonstrate compliance, it could seek repayment. "They could come back and say, because you can't prove this, we want our money back," the staff member said, but added the risk was low given the district’s history and the corrective action underway.

The auditors also walked trustees through budget and fund-balance figures included in the report: a schedule showed a revenue surplus of $1,586,799; an unexpected balance of appropriations of $6,241,024; and, after adjustments for nonspendable prepayments of $1,039,783 and an increase in committed fund balance of $28,773, an unassigned fund balance at year end of $6,759,267. Pratt summarized what the report presented as "roughly, [a] budget and overall budget surplus of 7,800,000." Pratt said the GASB pronouncement that took effect for the year primarily changed presentation wording and did not materially change the district’s reported results.

Trustees also discussed student activity funds after a board member who reviewed the audit letter urged stronger controls. That member said student activity accounts are high-risk because they often involve cash and staff turnover. Pratt offered the audit firm’s student-activity manual and training; district staff said principals received mandatory training last spring and that district accountants visit schools to assist new bookkeepers and principals. The district indicated it will offer another training session with the auditors.

Votes at a glance: the board moved to accept the FY24 audit report; the motion carried with ayes voiced by all trustees present. The audit presentation was followed by approval of an expendable-trust transfer (see separate action item). The board then adjourned the special meeting.

The district’s corrective action plan for the Title I documentation finding is included with the audit and will be submitted to the federal data‑collection process; the district said it will provide the written procedures to state or federal reviewers if requested before the March 31 target date.