External audit gives Superior School District an unmodified opinion; reserves and debt reviewed

Brock Guyen, the principal in charge of the district's annual external audit, told the Board of Education's Committee of the Whole on March 3 that the audit of the 2023-24 fiscal year received an unmodified opinion, the highest level of assurance an auditor issues.

The unmodified opinion means the financial statements are presented fairly in all material respects, Guyen said. He summarized results including a positive change in fund balance of a little more than $1 million, an unassigned fund balance of about $17,000,000, and a net reduction in tax-supported general obligation debt from about $75 million to just under $68 million.

The unmodified opinion matters because it signals the district's financial statements are reliable for users such as bond investors and oversight agencies. Guyen highlighted the district's overall fund balance trend, then focused on the unassigned reserve relative to the district's roughly $64,000,000 in annual expenditures. He said that while the district's reserves remain within commonly-cited ranges, they sit near the lower end of the recommended band.

Guyen also reviewed standard management-letter items the auditors included. He said two recurring items'limited segregation of duties and material audit adjustments'are common among school-district audits. He noted a repeat issue with bank and investment reconciliations, which auditors helped to resolve during the year and do not expect to continue into 2025. On compliance testing tied to grants and contracts, the auditors reported no findings.

On cash and debt, Guyen said the district made scheduled principal and interest payments totaling about $9,800,000 in 2024, of which roughly $7,400,000 was principal reduction. He said the district issued one new note of $554,000 during the year. Food-service reserves remain strong at just under $1,300,000 and a large donation in Fund 21 contributed to that fund's increase in 2024. Guyen explained an accounting presentation of the Wisconsin Retirement System (WRS) pension measurement that produced counterintuitive negative numbers in some years but said WRS remains a well-funded plan.

'You came out ahead of the game by a little over a million dollars,' Guyen said of the year's results. He added that the district's unassigned reserves were 'right in the ballpark' of the industry averages auditors observe.

Finance staff present noted turnover in the business office and thanked the auditors for working with the district to deliver the report earlier than the prior year.

The audit was presented as an informational item; the Committee of the Whole recorded the presentation and will forward recommendations to the regular board meeting on March 17 as appropriate.