Auditors: Federal shutdown delays Cloquet single audit; district to split reports, issue financial statements first

The Cloquet Public School District heard on Oct. 27 that a federal government shutdown has delayed the district’s federally required “single audit,” forcing auditors to split the audit work and issue the financial-statement report before the federal single-audit can be completed.

Business Manager Candice Nellis told the school board the district exceeds the $750,000 threshold in federal funds that triggers a single audit. “Because we have more than $750,000 in federal dollars that come through our district, we have to do what’s called a single audit on our federal dollars,” she said.

Luke Graden, a principal auditor with CLA, told the board the firm is close to finishing the district’s financial-statement audit but cannot issue the single-audit report while a federal form used by the Federal Clearinghouse remains unavailable. “Frankly, I don’t see that changing in the very near future,” Graden said, describing the government shutdown’s effect on the timeline.

Graden said the work that applies specifically to the single audit — testing federal programs and related compliance items — is largely complete, but CLA cannot take the final administrative steps needed to issue the single-audit report until the federal document is published. He said the Minnesota Department of Education had informed districts it would accept an extension to March 31, 2026, for single-audit submissions; that extension mirrors the federal clearinghouse deadline but depends on the federal form being released.

Because the federal form has not been published, CLA recommended splitting the deliverables: finish and issue the financial-statement audit and present it to the board this fall while holding the single-audit report until the federal requirement is available. Graden told the board his goal was to have the financial-statement audit issued no later than the end of November and that the presentation of finalized statements should be scheduled for the Nov. 24 board meeting, with the board materials delivered by Nov. 19. He offered to present a final-draft fund-level presentation earlier (Nov. 10) if the board wished, but said formal issuance was likely to be late November.

Board members pressed on whether the district could approve the financial-statement audit without the single-audit. Graden said the board could act on the financial-statement audit at one meeting and approve the single-audit at a later meeting once the federal documentation is available. The board directed staff to plan a presentation and to provide the board packet by Nov. 19 if CLA can meet that schedule.

What happens next: the financial-statement audit will move through CLA’s final internal review and, if all goes as Graden hopes, the district will present and act on that report at the Nov. 24 board meeting. The single-audit matter will remain on hold until the federal form is published and CLA can complete its final issuance steps; state guidance allows an extension to March 31, 2026.