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External auditors report draft clean opinion but flag cash‑reconciliation weakness and two federal program findings
Summary
Auditors presented draft FY24 financial statements with an expected unmodified opinion, declined findings in two federal programs and a material weakness for untimely monthly cash reconciliations; administration said it aims to complete the audit in August and outlined staffing and process changes.
Auditors from the district’s external firm presented draft results of the fiscal year 2024 financial statement audit and the single audit, reporting an expected unmodified (clean) opinion for the financial statements while identifying several findings the district must address.
Key findings: Chris Knopec and Troy Gabler reported two findings in federal program testing (a Child Nutrition reporting difference equal to about 18 meals and deficiencies in procurement documentation for two special education contracts). The number of program findings declined from seven in the prior year to two so far in this audit cycle.
Material weakness and compliance items: Auditors said they identified a material weakness related to untimely monthly cash reconciliations and late adjusting entries, which contributed to a delayed audit schedule for FY24. For Minnesota legal compliance (the Office of the State Auditor checklist) they reported two matters: three invoices tested were not paid within the 35‑day statutory timeframe and the district lacked an annual formal delegation of authority related to electronic funds transfers.
Public comments and statute: Earlier in public comment, resident Peter Hendricks had pointed the board to Minnesota statute 123B.077 and said the district’s FY24 audit — due to be filed with MDE and the state auditor by Dec. 31 — remained incomplete. Hendricks told the board he would share a series of emails obtained through a data request that documented repeated schedule slippage with the district’s auditors.
Administration response and timing: Chief Financial Officer (Chief Sager) and Superintendent Stanley acknowledged the backlog and told the board the district has a plan to stabilize staffing and reconciliation processes so FY25 audits can be completed on time. Auditors said they are drafting financial statements and, working with district staff, expect to issue final audit reports in August but cautioned timing depends on completion of reconciliations and internal reviews.
Board interest and follow up: Directors asked for a firm timeline, asked how the district will prevent recurring delays and requested a future board briefing when the final audit report is issued. Administration and auditors agreed to return with the completed reports and recommended corrective steps.
Ending: Auditors said they will return to present the final audit letter and required communications when the work is complete; the board will act to accept the audit once presented.
