Duluth Public Schools board moves to develop $7.6 million in cuts after clean audit with material weaknesses

The Duluth Public Schools (ISD 709) School Board on Dec. 17 directed district administration to develop reductions totaling up to $7,600,000 across fiscal years 2025 and 2026 and approved the district's 2024 certified tax levy of $44,959,128.28.

The action followed an audit presentation by WIPFLI partner Michelle Swaboda and a financial review by Executive Director of Business Services Simone Zunich. Swaboda told the board WIPFLI issued "an unmodified opinion on the basic financial statements, which is a clean opinion," but reported two material weaknesses related to audit adjustments/reconciliation of significant accounts and financial statement presentation and disclosure.

Those adjustments and presentation issues help explain why the district moved $5,000,000 from assigned fund balance to unassigned in 2024, Zunich said: "we did move $5,000,000 from your assigned fund balance in 2024 over to unassigned." She and Swaboda told the board that without that transfer the general fund would have shown an unassigned deficit of about $4,000,000. Swaboda and Zunich also presented fiscal-year results showing a general fund deficit of about $4,900,000 for the year ended June 30, 2024, after revenue and expenditure variances and one-time other financing sources such…