NDE requests additional auditors to raise district audit coverage amid charter growth

The Joint Subcommittee heard from department staff about budget account 2719 and a request for additional auditing capacity to expand financial and compliance monitoring for school districts and charter schools.

Deputy Superintendent Megan Peterson said the Office of District Support Services and the Office of Division Compliance manage subgrant oversight, monthly reimbursement processing and auditing work. Peterson said the department has revised its audit methodology after a recent audit finding and seeks to increase sampling in larger districts: "we're trying to come to more of a a median level of auditing, somewhere around 10%." She said the department currently audits roughly 3%–6% of schools in larger districts and wants a more consistent standard.

Peterson told lawmakers the number of charter schools has grown since 2011 — by 49 schools with five more slated to open in fiscal year 2026 — and that two cities have been authorized as charter school authorizers with more openings expected. The department said three additional auditors would help it manage monitoring, fiscal subrecipient reviews, risk assessments and audits of districts and charter schools, and ensure accurate pupil counts for People Centered Funding Plan payments.

Committee members asked how the department calculated the need for three auditors; Peterson said the request was based on current workload statistics and an estimate of the time needed to reach the department's target audit coverage. The subcommittee did not take action during the hearing.