Appleton Area School District audit: auditors issue clean opinion, note pension valuation adjustment

Leah Lasecki, lead auditor with CliftonLarsonAllen, presented the Appleton Area School District's 2023–24 audit to the Board of Education and delivered a clean audit opinion on the financial statements.

Lasecki told the board the firm performs two distinct audits for the district: the financial statement audit and a federal/state compliance audit. She said the district also receives an examination of its DPI aid certification. For 2023–24 the auditors tested four federal programs (the child nutrition cluster, Title I, ESSER and the 21st Century Community Learning Centers grant) and two state programs (equalization aid and the school-based mental-health services grant).

The audit report contained no internal-control deficiencies over compliance for federal and state awards, Lasecki said. "We identified no control issues whatsoever in federal and state awards," she told the board.

The auditors did record two internal-control matters. Finding 202401 arose because the district outsources preparation of its financial statements to the auditor; Lasecki explained that practice is common but technically produces a finding because the financial statements are supposed to be prepared by the district. Finding 2024002 reflected a material adjustment to district-wide financial statements: the district’s supplemental pension plan had not previously been valued under the applicable accounting standards. Lasecki said the supplemental pension valuation is about $20 million and that the adjustment affected the district-wide statements rather than the district’s general ledger.

Other year-end cleanup items included capital accounts and self-funded activity adjustments; auditors described most journal entries as minor cleanup and said management corrected proposed material items. Lasecki also noted an estimated $337,000 of subscription-based IT arrangements that some entities record as long-term liabilities; the auditors said the cost to value those contracts outweighed the benefit in this instance and it was not recorded as a liability.

The audit presentation included a financial-trends review. As of June 30, 2024, the district reported approximately $136 million in governmental fund balance, of which $35 million was assigned for specific purposes and $15 million was unassigned. Auditors noted the district’s unassigned-plus-assigned fund balance is within a commonly used benchmark range (20–25% of operating expenditures), and that a $2 million deficit could be accommodated before falling below the lower bound of the benchmark.

Board members thanked the audit team and district finance staff for what administrators described as a smooth audit process. No disagreements with management or scope limitations were reported.

This item was presented to the board for review and discussion; the transcript records no separate formal vote to accept the audit report during this meeting.