Mercedes ISD audit returns clean opinion; trustees split over late delivery, approval fails

Royal Cantu, audit supervisor at Casco's and Associates, presented Mercedes ISD's annual financial audit for the year ended Aug. 31, 2024, saying the district earned an unmodified opinion and that auditors found no significant deficiencies or material weaknesses in internal control or federal program compliance.

The audit presentation matters because an unmodified opinion signals the auditors concluded the district's financial statements are presented fairly “in all material respects.” During the special meeting, multiple trustees raised concerns about receiving the report late and asked for more time to review the 95-page packet before voting to accept it.

Cantu told the board the district received an insurance lag report only the day before the meeting; that delay contributed to delivering the audit later than the board's usual December presentation. He described several quantitative findings and recommendations included in the management letter: an unassigned general-fund balance described in the presentation as “13,000,000 and 87,000,” total general-fund expenditures of about 57,623,000 (adjusted to 57,605,173 after removing capital outlay), a calculated daily operating cost of roughly 157,822 and about 83 days of operation covered by the unassigned fund balance. He also identified smaller recommendations: a $16,000 deficit in the debt service fund; seven instances (of 50 tested) where purchase orders were issued after goods or services were received; and two instances (of 25 tested) of credit-card invoices not stamped paid. Cantu said these items were recommendations rather than findings requiring corrective action and noted last year’s federal-program findings had been corrected.

Trustees pressed for clarity about whether the audit required corrective action. Cantu said no new findings required corrective action for the fiscal year. Several trustees nonetheless said they did not have adequate time to review the full report. One trustee who said they had not reviewed the full packet told colleagues they could not in good conscience approve the audit without more time; other trustees said they had reviewed the summaries and corrective-action history and were comfortable moving forward.

The board took a motion to approve the district audit report. The motion was made and seconded but, after confusion and multiple voice votes, the chair announced the motion “dies on the 3 3 split.” The meeting record shows disagreement about whether the initial voice vote had passed; ultimately the board did not adopt the audit at that session and arranged a follow-up meeting to give trustees more time to review the packet.

The auditors and district staff outlined next steps: staff said they could bring the audit back at a special meeting scheduled to meet posting requirements. Trustees discussed scheduling options (Saturday evening or Monday noon were proposed) to allow additional review and training for board members who requested it. The auditor and business office staff were thanked for the presentation.

Votes at a glance

- Motion: Approve Mercedes ISD District Audit Report for fiscal year ended Aug. 31, 2024. Mover: Mr. Graves. Second: Mr. Naugaso. Tally: Yes 3, No 3. Outcome: failed (tie). Note: transcript shows initial confusion about whether a unanimous voice vote had been recorded; the final announced result was a 3-3 tie and the motion did not pass.

Clarifying details and outstanding items noted during the meeting included the late delivery reason (insurance lag report provided the prior day), the presence of a 95-page audit packet trustees said many had not had time to review, and specific manager-letter recommendations listed above.