District audit shows clean financial opinion but state compliance findings; auditors flag ELOP and instructional minutes

Auditors from Nigro Nigro presented the Banning Unified School District’s fiscal year 2023–24 financial audit to the Board of Trustees on Jan. 23, reporting a clean opinion on the financial statements but a modified state compliance opinion tied to specific findings.

Why it matters: Audit opinions determine whether financial statements are fairly stated and whether the district complied with state and federal program rules; findings can trigger financial adjustments and require corrective action with the California Department of Education (CDE).

Oscar Gonzalez, senior manager at Nigro Nigro, told the board the firm issued an unmodified (clean) opinion on the district’s financial statements and no reportable noncompliance for the federal programs tested, including the Education Stabilization Fund (ESSER) and the Special Education Cluster.

"In terms of the financial statements, this year we did issue an unmodified opinion," Gonzalez said during the presentation. He added that federal-award testing for ESSER and special education showed no internal control weaknesses.

However, the auditors issued a qualified opinion on state compliance. Gonzalez identified two state compliance areas with possible financial impact:

- Expanded Learning Opportunities Program (ELOP): Gonzalez said ELOP was a new state compliance area for 2023–24 and that many districts had implementation challenges. "If you don't hold the program at every single school site and you just do it at a central location, the district must offer transportation," he said. Auditors found the district lacked documentation showing required public communications and transportation offerings for some ELOP sessions, creating an estimated financial exposure that the district is coordinating with CDE to resolve.

- Instructional minutes calculation: Auditors found one school site’s grades 4–6 schedule fell short of the state-required 54,000 instructional minutes, offering about 52,875 minutes—short by 1,125 minutes. Gonzalez said that shortfall can carry a financial impact and recommended earlier calculations and notification when bell schedules change.

Gonzalez also noted material weaknesses and findings numbered 1–5 in the audit letters related to internal control matters, and findings 6–9 tied to state compliance that led to the qualified opinion. The district’s representative said staff have begun working with CDE to mitigate the potential financial impacts.

Trustee Trautman asked for clarification about the state compliance impacts, prompting Gonzalez to walk through the ELOP transportation requirement and the grades 4–6 instructional minutes calculation.

The auditor presentation, including the letters and the schedule of federal and state expenditures, was submitted to the State Controller’s Office by Dec. 15 as required and was presented to the board within the 45-day window.

What’s next: District staff said they are coordinating with CDE and updating site-level calculations and documentation procedures to address the findings. Any resultant monetary adjustments or corrective plans will be reported back to the board.