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Audit firm reports unmodified opinions for FY22 and FY23 but flags internal-control weaknesses and late federal filings
Summary
External auditors presented fiscal-year 2022 and 2023 audits to the Rapid City Area School District 51-4 board, reporting unmodified opinions for financial statements and single-audit programs but noting material weaknesses in internal controls and late filing to the Federal Audit Clearinghouse.
Devin Pfaff, a partner at KC Petersen and Associates, told the Rapid City Area School District 51-4 board that the district's 2022 and 2023 financial statement audits received unmodified opinions, the standard audit opinion that indicates the statements fairly present the district's financial position.
Pfaff said auditors proposed multiple audit adjustments (25 in 2022; 24 in 2023) and reported two material weaknesses in both years related to internal controls over account reconciliations and preparation of the financial statements. He also said the district did not meet the federal deadline to submit the single-audit data collection form to the Federal Audit Clearinghouse for both 2022 and 2023; auditors said they expect the district to be on track for timely filing for 2024.
On the single-audit compliance work, Pfaff said the 2022 single audit covered three federal programs and about $15.5 million in federal aid — including Title I, the special education cluster and ESSER funds — and received unmodified opinions with no findings. For 2023 auditors examined three programs representing about $31.9 million (mostly ESSER); the audited programs received unmodified opinions, with a single material weakness reported related to payroll documentation.
Coy Sasse, assistant/board finance lead (presentation moderator), and board members discussed other financial indicators. The general fund's unassigned fund balance was reported at about $14.5 million (approximately 15% of revenues) in 2022 and $17 million (about 17% of revenues) in 2023. Auditors noted that the apparent large jump in revenues for 2023 is partly attributable to capital projects recorded as fixed assets for a middle school building project rather than operating expenses.
Pfaff highlighted that food service and preschool enterprise activities returned modest surpluses (about $800,000 and $80,000 in 2022; about $218,000 each in 2023), and that days cash on hand improved overall. He also presented enrollment trend data the state maintains and warned of enrollment declines that affect state aid calculations.
Board members asked technical questions about the food service surplus, capital outlay and audit timelines. An auditor and district staff explained that food service generally operates as a self-sustaining enterprise fund, and that federal reimbursements and temporary pandemic waivers affected 2022's figures.
The presentation did not change the audit opinions but identified control improvements the district must make; auditors and staff said work is underway to correct the weaknesses and to file federal audit reports on time in 2024.
