Audit: Southeast Polk issues unmodified opinion but repeats internal-control weaknesses; federal programs tested with no findings

Auditors from Bonsack & Fromelt presented the district’s 06/30/2024 audit to the Southeast Polk Community School District board, reporting an unmodified opinion on the financial statements but repeating material weaknesses in internal controls related to bank reconciliations.

Mia Fromelt, the presenting auditor, told the board the district expended "6,700,000.0 in federal awards for fiscal year 24," with Child Nutrition representing "3,100,000.0," ESSER representing "1,400,000.0," and Title I representing "1,100,000.0." She said ESSER funding has expired and federal dollars should be expected to decline going forward.

Fromelt reported three audit deliverables: the bound audit document, a board communication letter and a letter on control efficiencies that contains observations and recommendations. For the financial statement audit, auditors issued an unmodified opinion, meaning the financial statements comply with generally accepted accounting principles.

For the government auditing standards portion of the work — which reviews internal controls and compliance — the auditors reported repeat material weaknesses over bank reconciliations and adjustments required to align records to GAAP. The audit team said the FY2023 audit was issued in June 2024 (delayed) and that the FY2024 audit showed improvement but still required reporting until the issues are fully corrected. The district has planned to issue next year’s audit by March 31 to remove the reporting requirement that contributed to a high-risk single-audit designation.

For the federal single audit, the auditors tested the district’s largest programs, including the Child Nutrition Cluster and Title I. Fromelt told the board, "We had no findings in either of those two programs. Both no findings over internal controls and no findings over compliance with their requirements." The audit presentation also highlighted significant accounting estimates affecting the financial statements, including pension plan assumptions, retiree health coverage options for early retirees, and depreciation of capital assets. Fromelt noted a new accounting standard in FY2025 related to compensated absences that will change how sick leave and other leave are accounted for.

Board members asked for clarification about the prior-year delays and outstanding reconciliations. The auditors and staff said turnover in the business office in FY2023 contributed to timing issues; reconciliations have improved (moving from roughly a year behind to about six months behind), but the condition remains a reportable weakness until fully corrected.

The board accepted the auditors’ presentation and discussion items for follow-up.