RPS audit yields clean opinion; superintendent flags FY27 deficit and proposes $2M allocation

The Rochester Public Schools board voted to accept its FY25 audit after auditors issued an unmodified (clean) opinion and reported no written findings on internal control or Minnesota legal compliance.

Nancy Schulzenberg, lead auditor for Bergen KDB, told the board: “We are issuing an unmodified opinion on your financial statements,” and noted the absence of written findings. The audit materials and related communications showed the district’s financial statements were fairly stated in all material respects, the auditors said.

Finance presentations highlighted several budget details. Director of Finance Andy Krogstad and auditors reviewed asset categories and depreciation (auditors cited about $23.6 million in depreciation expense recognized in FY25). Krogstad reported disposition revenue of roughly $95,000 from equipment sales for the year.

Superintendent Patel told the board that while FY25 revenues exceeded expenditures in some restricted categories, about $2 million of those available amounts could be proposed for commitment toward reducing the district’s FY27 deficit. “I plan to recommend to you when you begin work on the budget in December to commit that amount to reducing the deficit further for the ’26–’27 school year,” Patel said. He said committing that $2 million would reduce the deficit to about $8.4 million but that “somewhat more than $10,000,000” will still need to be closed overall.

The audit presentation included a fund‑balance analysis showing an increase in unassigned general‑fund balance of about $2 million (about 17.2% of expenditures) and a state‑calculated unrestricted fund balance at roughly 33% of expenditures, up from 26.6% the prior year. Auditors also noted growth in debt from new bonds and COPs but said the district’s reserves and accounting practices met the board’s stated policy thresholds.

The board moved and approved a resolution accepting the audit report as prepared by Bergen KDB.

Next steps: the superintendent said he will present recommended budget actions in December to address the FY27 deficit and board discussion on budget adjustments will continue into the winter and spring budget cycle.