Aaron Dahl, auditor for Bergen KDB, told the Delano Public School District board on Thursday that auditors issued an unmodified opinion on the district's fiscal 2025 financial statements, the highest level of assurance the auditors can give. "For fiscal '25, we did issue an unmodified opinion on the financial statements," Dahl said during the audit presentation.

Dahl said the auditors also reported one internal-control finding for the district: a lack of segregation of accounting duties. He attributed the overlap to the district's small size and said the issue is frequently disclosed under auditing standards, not necessarily evidence of malfeasance. "There is some overlap in duties within the district's office in the accounting," he said, adding that full segregation would likely be cost-inefficient for a district of this size.

The audit presentation showed revenue and enrollment trends that shaped the fiscal results. State aid remains the district's largest funding source (about 77% of general-fund revenue), which rose by roughly $700,000 in 2025 largely because of increased special-education aid and other state supports. Local property taxes accounted for about 16% of general-fund revenue, increasing by about $243,000.

At the same time, federal pandemic-era grants declined: "a lot of those ESSER funds'dropped back down to a kind of normal basis there in 2025," Dahl said. The drop in federal "other" revenue accounted for about a $466,000 decrease in 2025.

Budget-to-actual results were more favorable than the original projections. The board packet showed an initial projected deficit of about $1.4 million, a revised budget deficit of roughly $855,000, and actual results narrowing the deficit to about $285,000 (a favorable variance near $570,000). Dahl said that operating-capital balances were reduced by planned projects, and the operating-capital balance fell from roughly $912,000 to $488,000 during the year.

Board members pressed staff about enrollment changes and fund balances in community education. One member asked whether community-education fees should be reduced given that the community-ed fund balance has grown to more than $1 million; district staff said they will review fees and program costs. "She's going to be able to look at that," a district finance staffer said of Abby Lang's upcoming review; staff said that a budget meeting was scheduled to dive deeper into community-ed fund uses.

Dahl also told the board that pupil-unit calculations and open-enrollment outflows contributed to the modest declines in pupil units. He said the district's resident ADM was relatively flat year to year (about 2,258 to 2,266), with a small increase in students coming from outside district boundaries offsetting other losses.

The audit report included a separate Minnesota legal compliance review; Dahl said auditors found no compliance exceptions in bid testing, collateral or conflicts-of-interest testing.

Next steps: board and staff said they will continue budget work in upcoming meetings, including follow-up on the community-education fund and a deeper review of enrollment trends prior to FY26 budget finalization.