Evanston CCSD 65 audit issues unmodified opinion, flags two material weaknesses including TRS shortfall and unreconciled cash

Nick Cavalieri, the principal on the district’s fiscal year 2024 audit, told the Evanston CCSD 65 Board of Education on March 10 that auditors issued an unmodified opinion on the district’s financial statements and related reports.

Cavalieri said the auditors also reported two material weaknesses. "The first material weakness relates to the bank reconciliation process," he said, noting the value presented in the district's books exceeded bank balances by about $575,000. The second issue, he said, was an amount payable to the Teachers’ Retirement System (TRS) of $718,000 that had not been remitted in fiscal 2024 and was paid in fiscal 2025.

The audit covered the district's annual financial report filed with the Illinois State Board of Education, the consolidated year-end financial report, and the schedule of expenditures of federal awards. Cavalieri said the auditors rendered unmodified opinions on those filings as well and completed a single-audit review of major federal programs. He said the district expended roughly $13.1 million in federal awards and the auditors audited three major programs (Head Start, Title I, and ESSER/pandemic funds); the auditors reported no compliance findings from that work.

Board members asked how the auditors assess internal controls when board members are not interviewed. Cavalieri described the firm's standard approach—walkthroughs, testing and re-performance, and sampling—and said auditors also perform procedures to identify adjustments or misstatements that administration might not detect.

Tamara (district finance leadership) responded to questions about corrective work on the TRS matter, saying the district had made the TRS payment in December and had taken steps to tighten procedures, consult with staff, and prevent recurrence. She said staff who prepare the TRS filing had received oversight and the district was reviewing the report on a more frequent basis.

Cavalieri and district staff also made recommendations to strengthen internal control documentation and to add independent review of year-end journal entries (for example, entries that true up amounts between Park School and the district). The auditors recommended reconciling bank and investment differences until they were resolved and reviewing TRS reporting monthly.

Why it matters: An unmodified opinion indicates the financial statements fairly present the district's finances under the reported basis of accounting, but material weaknesses identify control gaps that could allow material errors. The board and administration said they are taking steps to remediate the findings and to tighten documentation, reconciliations and secondary review procedures.

What’s next: District staff said they have engaged the district’s software provider for reconciliation training and will document control steps; administration said it will report back to the board on remediation steps.