Auditor issues clean opinion; Little Falls board approves 2024 audit and revised 2024–25 budget

External auditors told the Little Falls Board of Education on Feb. 10 that the district's 2023–24 financial statements received an unmodified (clean) opinion, a marked improvement from the prior year's modified opinion, and the board voted to accept the audit.

John Archer, partner at Schleiner, Winder & Company, presented the audit and summarized the firm's findings. Archer said the auditors were able to issue an unmodified opinion because issues that produced last year's modified opinion (bank reconciliation irregularities) were resolved for 2024. He thanked district staff for responsiveness during the audit and said there were no unusual or fraudulent transactions identified.

The audit included three compliance findings the auditors considered noteworthy: - UFAR reporting and late submission: Uniform Financial Accounting and Reporting (UFAR) submissions to the Minnesota Department of Education were late; part of the issue stemmed from last year's late upload of opening numbers to MDE, which generated reconciliation errors carried into this year's audit. Archer characterized the remaining UFAR errors as a one‑time carryover from last year's delayed submission. - Prompt payment of bills: Minnesota statute requires public entities to pay valid invoices within 35 days. The auditors' sample disclosed several invoices paid after that window and reported the matter as a finding under state law. - Unclaimed property: The auditors found a number of outstanding checks in bank reconciliations dating back to 2018; Minnesota rules require checks outstanding longer than three years be turned over to the state (the Office of the State Treasurer/Commerce), and the auditors recommended compliance with that process.

Archer also reported a single‑audit compliance item related to the federal child nutrition program (meal claims). A point‑of‑sale system change led to mismatched counts between school levels; the auditors extrapolated the variance, noted it as a control and compliance item, and recommended tightening controls over meal submissions. He said the item did not require an adjustment to the audit opinion.

Financial highlights presented by Archer included: - The district received an unmodified opinion for fiscal year ending June 30, 2024. - The general fund showed an actual spend down of approximately $211,000 for the year compared with a planned decrease of about $805,000. - Unassigned (undesignated) fund balance increased by about $460,000 year‑over‑year and represented roughly 4% of annual budgeted expenses; the district policy target is 5–7%.

Following Archer's presentation the board unanimously approved the audit as presented (motion by Sharon; second by Dan).

Later in the meeting the board considered and approved a revised 2024–25 general fund budget presented by district staff. Key changes in the revised budget included: - Addition of a voluntary pre‑kindergarten grant: the district received 60 seats in a VPK grant that generates about 35.4 ADM for the year. - Revenue increases: an added $200,000 in special education aid, roughly $94,000 in additional federal aid estimates, and about $160,000 in local revenue increases (participation fees, interest earnings, etc.). Total revised general fund revenues were presented as $35,354,808. - Expenditure increases: a total proposed increase in general fund expenditures of about $852,000 for purchase services, supplies and equipment. Notable items included $150,000 purchase services (speech therapy $150,000 noted separately in packet), $55,000 for a band/choir trip funded by fundraising, $42,000 in summer‑school transportation (100% reimbursed by COVID funds), and $90,000 for a special‑education vehicle (with a 5‑year depreciation schedule and 20% annual depreciation aid reimbursement).

District staff said the revised budget produces a projected unassigned fund balance near 6.33% (an increase of roughly 2 percentage points), which the board characterized as improved but still short of the 5–7% policy target in prior years. The board approved the revised budget (motion by Dan; second by Mark) by voice vote.

Why it matters: the clean audit opinion signals improved financial controls after last year's modified opinion, but the compliance findings (UFAR submission timing, prompt payment and unclaimed property) and the single‑audit meal claim controls item identify specific operational areas the district must address. The revised budget reflects receipt of new state grant seats and other revenue changes and narrows the projected spend down for 2024–25.

Next steps and follow‑up: auditors and staff recommended that the district submit outstanding unclaimed checks to the state, tighten meal‑count controls for the food service program and continue efforts to meet UFAR deadlines; staff will continue to monitor fund balance and present follow‑up reports to the board.